Three Reasons to Befriend Your Competition

This article was contributed to the Wall Street Journal by Brian Scudamore.


I learned the hard way that my competitor is a far better friend than enemy.

In the early days of my company, one of my trusted employees left to start a junk-removal company of his own. I was furious–I’d shared my business secrets with him, and he’d returned the favor by becoming my rival. Obsessively, I followed his company’s every move.

I kept tabs on where his trucks were, ghost-called the company to hear their sales agents’ scripts, and envied him the free press his startup garnered. I saw it as a personal betrayal of friendship and mentorship, and turned it into an attack on my ego and a threat to my success. I stewed about it for years.

Faced with the same situation today, my reaction would be different. After 27 years, I’ve learned that if I’m worrying about what my competition is doing and frantically trying to out-think them, the only loser in the end will be me. Now, I have a winning mindset: I embrace my competitors.

Cooperating with the so-called enemy will seem counterintuitive, but here are three reasons why you should.

There are no secrets, anyway: Trust me on this one: There are no secrets anymore. All it takes to unearth a so-called secret is an online search, posing as a customer, or talking to former employees. So practice openness instead.

I routinely invite my competitors to join us for boardroom chats. While they initially find my frankness shocking, it’s amazing how many of them take me up on it.

During these meetings, I offer real insight about our company. I invite them to join our company-wide huddles. I’ve divulged our numbers and outlined my five-year vision in detail.

By simply extending the olive branch, I’ve been given some tips that have helped grow my business. One competitor told me they’d seen a 27% increase in closing ratio after they highlighted “no credit card required” on the homepage of their booking engine. He offered this insight because we’d helped him with a problem franchise partner. The two-way trust that’s created through transparency is invaluable.

By the way, I never ask for anything in these meetings. But I can tell you that the rate of reciprocity is mind-blowing.

Nice begets nice: I know I’m entering karmic territory here, but even when your competition does something unethical — such as attempt to steal your business plan, which happened to me — you can benefit from a calm, open-door policy.

We caught one competitor brazenly using SEO language to redirect our customers to their site. Initially, I was steamed. But because we’d already established a dialogue, it was easy to call up and say, “Not cool.” They listened and fixed the problem. A potentially litigious situation was diffused.

You can’t steal our real advantage: Business professors Adam M. Brandenburger of Harvard and Barry J. Nalebuff of Yale have comprehensively explored this idea in their book, Co-Opetition. They build the case that a smart business will leverage the strengths of another to go far beyond what can be done alone.

Here’s the key: I don’t worry about sharing with my competitors because I know that our greatest strength is the execution of our ideas, not the ideas themselves.

The way we treat our employees and customers, and how we think and operate as a team is what sets us apart. It’s impossible to re-create because it’s so singular to us, and what defines us as a company. Success happens because of core values like passion, integrity, professionalism and empathy.

You can’t steal execution or values. A copycat won’t necessarily succeed.

That employee who caused me unbelievable stress because he started a rival business? He eventually left the junk industry.

So stop worrying and open up to your competitors. You’ll be amazed at what you get back.