Collaborating With The Enemy: Competitive Advantage?

Most entrepreneurs view their competition as the enemy.  They stay far away. But a small junk removal business in Canada is making friends with their competition and believes it gives their business an edge. Consider this story and you be the judge of whether this could work for your business.

Brian Scudamore dropped out of high school in 1989 with $700 (£400) and a beat-up old pick-up truck to start his company 1-800-GOT-JUNK? Today they have 95 franchise partners across North America and are in 47 of North America’s top 50 cities.

Although he never finished high school, Scudamore loves nothing more than learning. Within his business he has established what he calls a Mentor Board of Advisors, a group of people he turns to for advice and learning. Not surprisingly this group includes mentors within his own industry, but what is unique about Scudamore is that some of these mentors run the businesses he competes against every day.

For example, one of these mentors runs one of 1-800-GOT-JUNK?’s closest rivals College Hunks Hauling in Florida. Scudamore first called them when they were both faced with a potential conflict. Together they resolved the challenge and ever since they have shared learnings and struggles and even asked one another for favours!.

Scudamore believes his philosophy so much that he has invited another competitor, Jason Mohr who runs Any Junk in London, to come visit their offices in Vancouver and even offered to pay half of his traveling costs! Together, they’ve shared best practices that each could apply in their respective countries.

Working in tandem with your competitors has benefits in addition to getting a good beat to what’s happening in your industry. Here are a few examples:

• An employee conducts him/herself inappropriately with your competitor – wouldn’t you rather a friendly call from your competitor to inform you so you can nip it in the bud?

• Need to collectively drive people to an area – Whether at trade shows or organizing events, customers may be more inclined to come if they can “kill two birds with one stone”

• Your competitor might want to buy your business – An acquirer would likely approach a company that they are familiar with and want to work with in the future.

Befriending your competition definitely requires a certain approach. Scudamore recommends leading by “sharing information first” because this establishes a basis for trust.

It makes sense. Why fight your competition when you can work with them to grow the size of the pie? Isn’t the expression “Keep your friends close. Keep your enemies closer?”

5 Responses to “ Collaborating With The Enemy: Competitive Advantage? ”

1. Ron Ratliff
   
   Said on January 13th, 2010 at 4:27 pm

   Stefan,

   I’m not really surprised to hear about this company doing things a bit differently. I used their services in Houston, TX many years ago when clearing out a storage unit for someone — and it was one of the best client service experiences that I have ever had!

   I enjoy your blogs and the very real stories of real companies providing high quality services as the basis of their growth and success.

   Thanks!

   Ron

2. Paul Simister
   
   Said on January 16th, 2010 at 2:28 pm

   Great article Stefan and I like your blog comment rules. I wish there was some way I could do the same to cut down on my spam comments.

   Anyway back to the issue of working with your competitors.

   It is counter intuitive but I teach the 5Cs of competition – collusion (illegal – you’re not meant to work that closely), cooperation, coexistence, competition and conflict.

   Your examples fit in with the cooperation level and you can see it in big business as well.

   Think airline alliances. There may be some crossover of routes but by co-branding, the airlines are able to give more flights to more destinations.

   Think of the motor industry. Some of the European car makers worked together to produce a new engine some years ago.

   It’s expensive to develop your own resources so it makes sense to share. It’s good for you and good for your customers who don’t have to pay excessive costs.

3. Sally Johnston
   
   Said on January 20th, 2010 at 6:38 am

   This is an interesting marketing strategy! This example shows that competitors do not have to be ruthless rivals. You can work in the same industry, refer clients to other organisations if there is an overflow and share resources. Interesting blog article Stefan.

4. Tim Read
   
   Said on January 26th, 2010 at 12:32 am

   Collaboration is obviously better than conflict – look at how estate agents set up near each other. I’ve got 26 restaurants within a mile of me, and many are on the same three streets! (in Crystal Palace, London, UK if you’re wondering!). I’m a web designer and if I meet my ‘competition’ at networking events, I’m always a bit bemused when they turn a cold shoulder.

5. adam matin
   
   Said on February 21st, 2010 at 4:32 am

   very good info.

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