Today’s world looks a bit like Wonderland: what seemed impossible just yesterday will be old news tomorrow. New companies, products, and markets appear faster than we can say the word “change”.
In these circumstances, it’s no wonder that most of us agree with the saying, “competition drives the market”. Unfortunately, however, we often act as if competitors are our enemies.
I’m a co-founder of a company in the ultra-competitive online education market, with more than 2.5 million users in multiple countries. So while I’m familiar with the concept of competition — I’m not naive — I’m convinced that organizations should be afraid of internal problems rather than other companies. From my experience, the business community can strengthen its every member if we build it on cooperation, not competition.
Nowadays, we try to solve problems by negotiating; many books and experts still compare business to war. Competition is often a lifestyle: people compete for higher grades, better things, and bigger salaries. Competition became an integral part of society due to historical, cultural, and other factors. Everyone’s an enemy, and this point of view remains dominant among business owners and CEOs.
Maybe in the past, it was helpful to think of competitors as foes, but the modern world is so interconnected that this perspective doesn’t allow us to see new opportunities, stands in the way of improving, and, as a result, weakens our products.
It’s been nine years since we started building CodeGym.cc from scratch. And while we were going along this path, we were making mistakes and learning from them. Knowing everything I’ve gained, I think that the main enemies of any business are:
- A wrong strategy: Sometimes, entrepreneurs pay too much attention to competitors’ strategies and try to create “something different” instead of focusing on their own vision. At other times, they just copy someone else’s strategy and try to implement it.
- A weak product: If your product is strong (and you deeply understand your customers’ needs and address them in the right way), there are fewer reasons to be afraid of the competition.
- A poorly organized or unqualified team: If your employees lack hard or soft skills, can’t communicate well, don’t stick to team goals, and manage their time inefficiently, even the right strategy won’t work as expected.
- Poor marketing or sales: This happens when we don’t properly understand our clients, choose the channels poorly, don’t pay attention to customer experience or have a strong sales team. In that case, it’s not our competitors’ fault.
- Inefficient processes and lack of efficiency among employees: No business can succeed long-term if its processes are too complicated, too slow, or unoptimized.
Of course, this isn’t a complete list. There are a lot of mental traps that business owners and executives can fall into. Many organizational issues are obstacles to building a better business (or becoming a better manager). But there’s one common thing amongst them: it’s not about competition.
If we want to find an enemy, we should look within. The best use of our resources isn’t to fight someone (in our head or on the market) but rather to invest in growth, creation, and development.
Make products, not war.
If that’s the case, what’s the role of our competitors?
Competitiveness is natural for humans and one of the biggest motivators. When you see something great, you want to create a masterpiece, too. When you see someone improving, you’ll likely make more effort yourself. Competition can drive creativity if we look at it healthily.
But what does healthy competitiveness mean? For me, it looks like a partnership. Adam Brandenburger and Barry Nalebuff introduced the term “coopetition”, which is a combination of cooperation and competition and which is used to refer to when rivals work together to achieve a common goal.
This partnership can be short-term or long-term and can focus on one or several areas. There are multiple examples of this concept in the modern business world. For instance, in 2008, UPS agreed to ship DHL’s packages (because DHL couldn’t do it at the time and asked a competitor for help). Companies from the same market can share technologies, like Ford and GM did in 2013 with the transmission, consult each other, or lend a hand when there’s a supply shortage. Of course, it’s not pure altruism, and both sides usually get something out of the collaboration. But it’s more than just an exchange; such partnerships often generate synergy for the whole market. Everybody wins, including the competitors, the customers, and the suppliers.
Building a business community is also a win-win. Informal gatherings, regular communication, and even exchanging ideas with companies from the same market are common in developed countries. The community can often help entrepreneurs to make important decisions or solve problems.
At the beginning of the 2010s, Airbnb faced a major challenge. It quickly and successfully grew in the USA, but it was yet to enter the European market. At the same time, the Samwer brothers, who were former Facebook investors, noticed a promising venture and created a similar website. It wasn’t their first time: earlier, they’d made a clone of eBay — a service called Alando — and sold it to eBay for $43m.
It was their typical strategy: create a similar service and sell it to the “original” American company. Airbnb was the Samwer brothers’ next target. They built a website called Wimdu which looked a lot like Airbnb, then offered it to Airbnb in exchange for 25% of its shares.
This choice wasn’t easy to make: if the company declined the offer, it had to compete with the clone in a foreign market and invest huge amounts of money to build a European branch from scratch. Brian Chesky (co-founder of Airbnb) and his executive team tried to develop a plan, but they couldn’t find a solution. Then Brian turned to Andrew Mason, CEO of Groupon, who’d been in the same situation before and who’d eventually decided to buy the clone (a service called CityDeal). Brian also asked for Mark Zuckerberg’s opinion (he voted to decline the offer) and consulted with other experts.
Collecting and processing different thoughts helped Brian to make up his mind. He decided to fight, declined the Samwer brothers’ offer, and expanded Airbnb into Europe by himself. It was the right decision, and the help from the business community played a large part in it.
Building a strong business community is beneficial for all members. My colleagues and I meet with teams from other IT companies to discuss various issues, organize meetups and share our experiences. For example, we recently visited the office of a popular IT company that created productivity apps and was one of the pioneers on AppStore. We talked to the team and discussed the company’s values, the scaling of their products, remote work, and more. This experience gave something valuable to both companies, including plenty of insights and new connections.
Later, I wrote a post about the visit on my Telegram channel, and I suddenly started to receive invitations from other companies. One of them was from a digital platform that connects sellers and customers. Again, my colleagues and I visited their office and facilities, and we even joined a closed meeting of several teams as they discussed that month’s results and their plans for the next one. This experience solidified my opinion: we’re willing to put our effort into building the business community because it generates enormous value for everyone involved.
Even great entrepreneurs are sometimes scared to talk about their experiences, and that fear can become a significant obstacle to building a solid community.
It’s time to get rid of this fear. Start writing articles, releasing podcasts, giving talks at conferences, and sharing your mistakes and victories. Share what you’ve learned and seen and tell your community about your lessons and conclusions. Embrace your imperfection and let other people and companies extract value from it. It will enrich our lives, businesses, and markets and make our brands stronger.
And maybe we are ready for it. Recently, I initiated research on the role of product managers in one of our local markets. We asked IT companies to join us and share their data. The results exceeded all our expectations. We have received over 400 questionnaires with answers from product managers of top products, many of which are known all over the world — Readdle, Grammarly, MacPaw, Reface, Genesis, etc.
Moreover, we also had 20+ interviews with CEOs and founders. They were willing to talk openly about corporate culture, the onboarding process, product managers’ goals, etc. Are they all competitors? In some way, yes. But they were happy to share their knowledge and invest in the community. To me, it’s a sign of the business community emerging, and I’m happy to be a part of it.
After all, it’s much more interesting to hear about mistakes than another story about “successful success”.
Author: Alex Yelenevych