Co-Opetition

Here is an article I wrote for another business oriented website. It is fairly long, but quite interesting. And the lessons are relevant to blogging too…

Co-Opetition = persuading your competition to co-operate with you for mutual benefit.

1.

Michael Winicki is a successful serial entrepreneur. He finds promising products that aren’t selling well, creates a marketing plan for them and sells them for a hefty profit.

As paradoxical as it sounds, one thing Michael learnt over the years is: if the product has no competitor, the product won’t sell well.

If Michael comes across a product that is very innovative, but finds that there is no competition selling something similar, he drops the product in a jiffy. 99 times out of 100, lack of competitors is a sign of a lack of market.

2.

“Nothing stirs the heart more than a healthy dose of competition.”

When Alexander – prince of Macedonia – was young, his father King Philip started looking for the best private tutor who could mold Alexander into a smart adult. Philip found Aristotle.

But Aristotle refused to teach Alexander alone. Refusing a lucrative offer from the king? That had never been done before!

But Aristotle remained firm: he would teach young Alexander only if Philip would find a few other students the age of Alexander who could study and compete with him. Aristotle knew that without competition, Alexander wouldn’t become all he could be.

Ptolemy and Selecus both studied with Alexander and became his best generals and trusted advisors. And they went on to create the Ptolemaic dynasty in Egypt and Seleucid dynasty in Asia after Alexander’s untimely death.

Alexander wouldn’t have become Alexander the Great without Ptolemy and Selecus.

3.

“One big hurricane is more noteworthy than a 100 small ones!”

Burger King followed a unique strategy when they started. Their strategy was: open up stores in close proximity to McDonalds. By opening shop close to McDonalds, they could attract people who were already going to a fast food joint to come visit them.

McDonalds were first worried about Burger King cannibalizing their sales. But they soon found that they need not worry at all. Burger King did attract customers who would have otherwise gone to McDonalds. But because Burger King and McDonalds were close together now, the combination attracted way more people to drive over to them!

People in the diamond industry in Antwerpen, London and Bombay have stumbled on this power of market gravity too. They found that by opening offices and shops next to each other, they would be eating up each others sales. But they would also attract more customers by being situated together than they would on their own. And all of their profits would increase together.

4.

“Divided we grow. United we grow more.”

Tony Pereira has a problem. He is the owner of a software publishing company. But his company only produces software for a very small market: the people that use IBM’s OS/2 computer operating system.

Because his target market is small, and his company is tiny too – most stores don’t provide any shelf space to showcase and sell Tony’s products.

What could he do? Tony came up with an idea. He formed the OS/2 Vendor Council.

He got two dozen other developers to come together under the council and jointly persuade retailers to carry OS/2 software.

Each company on its own was considered tiny to pay any attention to. But together, they held a lot of clout.

The two dozen vendors cooperated and created brochures that showcased all of their products. They also launched a joint advertising campaign in national magazines. They persuaded IBM to help fund the advertising.

And persuaded the retailers to carry their products on their shelves – and in return, they would add the retailer’s names to the national ads.

The council also developed a merchandising program to make it easy for the retailers to promote their products in the store – by providing them with flyers and in-store displays.

The joint effort paid off and everyone who joined the council noticed a significant increase in their sales!

5.

Gordon Currie is a web designer. When he first started on his own, he didn’t have very many clients. Nor did he have a lot of money to advertise and attract clients. So he did something un-imaginable. He contacted his competitors!

Gordon searched for other web designing companies and sent them a short email asking them to consider him for overflow work. Many companies did have more work than they could handle and did pass on their work to Gordon too!

6.

“One man’s trash is another’s treasure.”

Another entrepreneur – Richard Gottschneider – co-operated with his competition to grow his business too. Richard ran a real estate consulting firm. He actively sought out joint ventures with his competition.

He would approach a competitor and ask them if they could sell him their old and dead leads. And if they wanted, he would pass on his dead leads to them.Richard also ran a newsletter that talked about his new projects and shared relevant news. Richard initially mailed this newsletter only to his clients. But he soon started mailing it to 50 of his competitors too. The first two mailings he sent out to his competitors resulted in 2 new jobs and several new leads!

Richard soon grew his consultancy to $1.5 million a year – and a bulk of his leads came from his competitors!

Action Summary:

• Don’t be afraid of your competition. Co-operate with them to grow both of your businesses.

• Send them leads that didn’t pan for you, and ask them to send you their leads that didn’t work out for them.

• Band together with your competitors to form a huge cartel that has more power than any one of you alone would have.

Question: How will you use co-opetition to grow your blog traffic?A? Click to post your answer.

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Posted by Ankesh Kothari under Stratagems, Traffic on 06 Jun 2007
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