Co-Opetition - Adam M. Brandenburger [18]
While the traditional booksellers see only competition, Westheimer recognizes the elements of complementarity in the book business.
A dramatic example of mistaking Jekyll for Hyde is to be found in every office. When computers were first introduced, almost everyone thought they would eliminate “paperwork.” Words and data stored as minute magnetic impulses seemed like the greatest competitor paper had ever faced. There was talk everywhere of “paperless offices.” People even began to wax nostalgic about old-fashioned printed and written material. But the reality was very different. According to the Wall Street Journal, “Despite rising cost of paper and increased use of computers, offices are projected to use 4.3 million tons of paper this year [1995], up from 2.9 million tons in 1989. Offices will consume 5.9 million tons by the year 2000.”20 What computers really did was make paperwork easier to generate. To date, computers have complemented far more than they have competed with paper.
Even when they recognize a complement, some people turn it down. Citibank was the first bank to introduce the ATM, back in 1977. When other banks came along with their own ATMs, they wanted Citibank to join their networks. That would have made everyone’s ATM cards more valuable. When banks are on a common network, each machine complements all the others. But Citibank refused to join. It didn’t want to do anything that might help its competitors. It didn’t want to help Dr. Jekyll if that also meant helping Mr. Hyde. That decision came at the expense of Citibank’s own customers. Over time, the other bank networks became the national and international leaders, and Citibank customers were left out. The limited ATM access cost Citibank market share. Citibank eventually woke up. In 1991 it reversed course and joined the other networks.
Of course, a player can start out as Dr. Jekyll and turn into Mr. Hyde. Cable television originally complemented network television stations by extending their reach into towns with poor reception. However, over time, the cable companies started to broadcast more and more alternatives to the networks’ programs: HBO, CNN, MTV, Nickelodeon, Nashville, Home Shopping Network, and many more. Even people with good reception started signing up for cable. As viewers turned to cable programming rather than network shows, cable turned into more competitor than complementor to the networks.
Why is it that people tend to see Mr. Hyde and miss Dr. Jekyll? It’s the business-as-war mindset. Everything is competition, not complementarity. This perspective leads you to suppose that when customers buy someone else’s product, they’re less likely to buy yours. Or that when suppliers provide resources to someone else, they’re less able to supply you. It’s all competition.
Perhaps this mindset stems from the view that life is all about making trade-offs. No one can have it all. With only so much money, so much time, so many resources, people have to make choices. Customers and suppliers have to choose between you and the competition. It’s “either-or,” not both.
But that’s not always true. The trade-off mindset fails to take account of complements. When a customer buys a complementary product, that makes him more likely to buy yours. It’s both, not one or the other. Or when a supplier provides resources to a complementor, that makes it easier for him to supply you as well. Again, it’s both, not one or the other.
To help recognize Dr. Jekyll as well as Mr. Hyde, remember to think complementors as well as competitors.
Jekyll and Hyde
There’s a bias toward seeing every new player as a competitive threat.
But many players complement you as well as compete with you.
Look for complementary opportunities as well as competitive threats.
Making Markets
The fact that players can be both competitor