Written by Competition in business comes in all shapes and sizes and means different things to different people. For some, the very mention of a competitor sparks an instinctual “kill or be killed” motivation that can drive innovation, efficiency, and service. And while this attitude obviously creates a lot of value in the world, when you are creating a brand new market—like many media tech startups are doing—your competitors may be your best friends.
In media technology in 2011, most of us are in the business of changing people’s behaviors on a grand scale—an objective rarely accomplished alone. Companies like Myspace, Facebook, and Twitter collectively created a paradigm shift in the way people consume and interact with media. Changing behavior so drastically was critical to making all these services more valuable than each would be by themselves. Myspace was one of the first to lay out the concept of the “Profile,” while Facebook was the first to really get photosharing right, while Twitter took the status update to the next level. Today, of course, Myspace has fallen by the wayside, but both Facebook and Twitter are benefiting tremendously from their collective efforts in getting people comfortable with profiles, photosharing, and status updates. And they are working together: “Post Tweets to Facebook,” “Share your Farmville score on Twitter,” etc. The same sort of “co-opetition” is true for many other emerging media industries.
Take music streaming companies (Spotify, Pandora, Grooveshark, Rdio, etc.), for instance. It is in their collective interest to get people out of the behavior of purchasing songs/albums, and comfortable with the concept of music streaming, the revenue/pricing models of these companies, and the different behavior it takes to use a music streaming service versus just purchasing music. Whether they like it or not, they are working together to create an entirely new way of consuming music.
In the business I work in (display advertising technology), consider the Demand Side Platform (DSP). This term was only born in 2009. And like a lot of media/ad companies, there were a lot of fast movers/competitors. But they worked together to create a market on a massive scale. When the DSP first came about, media buyers were accustomed to spending on less sophisticated and less technologically advanced ad networks. But after the term DSP was popping up just about everywhere due to the number of players in the market, media buyers changed their behavior and started planning their buys to include DSPs. And as these businesses and partnerships have matured, it appears that the DSP is here to stay because they provide media buyers a very valuable service.
In the above examples, it does seem that the whole is greater than the sum of its parts. In media technology, we are tasked with the tremendous challenge of scaling both the chicken and the egg. As daunting as that is, it is glorious to know that there are other people, on other payrolls, working just as hard as you are to create that market.
I’m sure there are countless examples of businesses where these ideas don’t apply (very unique and sensitive intellectual property, for instance—like that story about Thomas Edison patenting the light bulb an hour before another guy). But for media startups, my limited perspective tells me that accepting and even embracing your competitors will serve you well more often than not.
