Coopetition. At first glance, it may look like a relatively simple concept – it’s just a portmanteau of cooperation and competition, after all. But in the business world, it’s a neologism that can make or break industries, drive millions in revenue, or cost millions in lawsuits.
What is coopetition?
As Jon Miller, CEO of ABM platform Engagio, neatly summarises: “[Coopetition] refers to any time you work in a partnership manner with companies that are also competitors.”
Coopetition is often seen as a central requirement in the technology industry, especially within the B2B market. And it should come as no surprise most major forms of technology simply wouldn’t exist if there hadn’t been some form of coopetition along the way.
Much of this success, as Tim Dyson, CEO of communications group Next 15, explains, comes down to the colossal funding and investment in the tech sector. “It’s pretty much non-trivial,” he says. “Many hundreds of millions of pounds are being invested every day. The pace of change in the tech industry is so rapid, that in order for a new technology to get a foothold, it has to do it relatively quickly, otherwise it disappears.”
Tim is convinced that if a company decides to ‘go it alone’, it would struggle to establish a market and survive. You just have to look at success stories like Intel and Microsoft – the latter whose operating system is used across multiple computing platforms – to convince you. On one level, Microsoft is cooperating, but on another, it’s competing.
“Pretty much all of the industrial architecture of today’s computer industry is there because many companies invested in the same areas, worked together and were willing to look at common standards,” Tim explains.
Coopetition examples: What does it look like in the current B2B market?
Turning our backs on Bill Gates and the 1970s tech boom for just a moment, let’s take a look at a more modern B2B example of coopetition.
While many would argue that account-based marketing (ABM) has been around in some form or another for decades now, its rise to prominence over the past couple of years has prompted huge overhauls of departmental structures, and complete transformations in marketing activity. And alongside any new tactic, strategy or activity, comes specialist vendors offering services and solutions.
“Early on, we very explicitly took on a strategy to work with any company in the ABM space in order to build the category together”
One such company is Miller’s California-based ABM vendor Engagio. If you type Engagio and Terminus (another ABM provider) into Google, you’d be presented with direct comparisons between the two solutions, reviews of which is better, and people questioning which brand they should spend their cash on. But dig a little deeper, and you’ll see that Engagio and Terminus are actually sharing a lot of each other’s content, whether that be the other brand’s tech stack on their website, shout-outs on social media, or co-chairing of event sessions: a classic coopetition model.
“Early on, we very explicitly took on a strategy to work with any company in the ABM space in order to build the category together,” explains Jon. “First and foremost, we wanted to do this through content and education initiatives.
“With ABM, for example, I think it’s more important to build the category than it is to worry about competing over any specific deal.”
As Jon hints, brands have to determine whether it’s more beneficial to grow the category, even if that means helping your competitors develop, or if it’s easier to keep your cards close to your chest, and flourish that way.
Some brands have a choice, and some don’t, says Jon. “For a company like Marketo [which Jon co-founded], having Salesforce show up as a competitor, it didn’t really have a choice, the two had to co-exist. Yet, in Engagio’s situation, we specifically chose to build up the ABM category with Terminus.”
Coopetition on a personal level
While, in theory, collaborating with your competitors can clearly prove to be fruitful, not every B2B marketer has the resource and budget of a Microsoft or Marketo.
Kath Pay, founder and CEO at consultancy Holistic Email Marketing, was astounded at the closed-off nature of the B2B email industry when she first landed on UK soil from Australia in 2004. To rectify this, one of the first things she did was to set up informal dinners, gathering industry thought leaders together over food and drinks.
"We were spreading all the information, rather than just extracting our own learning and keeping it for ourselves"
She’s keen to point out these get-togethers are organised without expectation or hidden agenda. “From the outset, we started getting to know each other as people, not just as brand competitors.
“By building up these relationships, we’d start sharing our challenges, trials and tribulations, and ultimately, our learnings from what we’ve gathered from the market. Therefore we were spreading all the information, rather than just extracting our own learning and keeping it for ourselves.”
Establish your goals and objectives
As with any area of marketing, the leading principle of coopetition is to clearly lay out your objectives, and stick to these fastidiously. Why do you want to build and be part of this community of competitors? Why do you want to help them?
For Kath, these are questions she constantly has to revisit to remind herself why she’s doing this in the first place. “I’ll often still turn to my team and ask them the question: ‘Why are we doing this?’
“When I hear my competitor use literally the same phrase or tactic I introduced to them earlier, I think, ‘why have I done this? Why have I taught my competitor this?’”
"I’ll often still turn to my team and ask them the question: ‘Why are we doing this?’"
The crucial consideration for Kath is that ultimately, it will yield lucrative long-term results – with the entire process always resulting in an improved experience for the customer. For her, the more a consumer enjoys and uses email, the more budget is afforded to email marketers, and, therefore, the more clients are available to Kath and her team.
“If you care about your sector, you’re going to want to make it better as a whole,” she stresses. “And if that means you all work together, then you will all benefit in the long run.
“My motivation has always been to help the email channel itself, help email marketers do a better job, which in turn ends up helping the end consumer. All of that eventually comes back to help my company in the long term.”
Measuring success
Something I’m sure you’ve been screaming at the pages while reading this is how do you actually prove the value of coopetition with hard metrics and solid revenue?
The question, as Kath explains, isn’t that easy to answer. “You’re really playing the long game here,” she says. “You’re not going to see results immediately.”
But Kath has noticed a more tangible, short-term benefit from coopetition: reciprocity. “People start to feel indebted to you,” she says. “I have some very loyal clients, colleagues, and even competitors – all of who at some stage I’ve taught, nurtured and worked with. They feel indebted to me because of that.”
Risky business: the disadvantages of coopetition
It should come as no surprise that coopetition is a marketing tactic that’s fraught with peril. And Next 15’s Tim warns marketers they must be aware how quickly the tables can turn in the coopetition game. “One minute you’re standing onstage together championing some new piece of technology that you’ve both worked on, but two weeks later you’re fighting in court over intellectual property and copyright issues.”
The challenge here, Tim explains, is to make it clear to the customer how you’re going to deal with those hurdles. “Show your clients the different teams that are working on different things are completely siloed, so they aren’t trying to promote two different points of view on an issue.
“Beyond that, you may have to adopt a more structural solution, which is to create separate companies to deal with the separate issues.”
"Microsoft literally put chicken wire in the ceiling so people couldn’t crawl between buildings"
For Next 15 and Tim, this was a route they had to take. As a marketing services group boasting 18 subsidiaries spanning multiple sectors across the world, they were always going to have customers who both compete and cooperate. “We probably have more companies than are typical for agency groups of our size, but we take advantage of this on a career path level. We can create career paths that a traditional, monolithic organisation would struggle to replicate.”
The old Chinese wall approach will obviously work in some areas, but not in all, yet Tim cites some drastic measures other companies have taken to protect their secrets. “Microsoft literally put chicken wire in the ceiling so people couldn’t crawl between buildings.”
While Tim and Next 15 don’t take quite such draconian measures, he does admit they have physical security in place between some teams, and different ID cards that only allow access to certain buildings.
Why’s it so hard to get right?
Fear of failure is an ever-present inhibitor for B2B marketers, and there aren’t many tactics that are as rife with risk as sharing the tricks of your trade with direct competitors.
“It’s a matter of making yourself vulnerable and sometimes that’s not comfortable,” admits Kath. “It’s much easier to stay in your own world and keep your secrets, tips and tricks to yourself – and only share these with people who will give you money. For me though, that’s not enough.”
Jon agrees, pointing out that a marketer’s natural instinct is to be scared. That’s why he stresses getting buy-in from your leaders is so essential. “If you’re a marketing leader and you’re wanting to work with your competitors and you don’t have your CEO’s support, I can imagine that’s pretty scary,” he says.
The best way to gain that support? Go about it as you would for any marketing initiative: talk to them and convince them it’s going to help you achieve your goals.
I’ll show you mine, if you show me yours
Despite the risks, Tim points out the more a brand puts into a collaboration, the more value they’ll extract.
“There’s always a fear that you’re the one that’s doing all the sharing and not getting anything back,” he confesses. “To some degree, there is always that risk, but there’s usually one company that’s more supportive of the movement; for example, Microsoft with computing or Intel with processors. So there’ll always be one company who has a bigger vested interest in the future of something.
“The companies that have most to gain usually do the most sharing, and it tends to operate relatively efficiently from that perspective.”
Ultimately, coopetition is an incredibly efficient way of building markets and of determining whether markets actually have any value. If you can’t get competitors to collaborate to some degree on the development of a market, chances are that market doesn’t exist or won’t last for long.
