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The Honolulu Advertiser

Posted on: Monday, August 13, 2001

Small businesses increasingly see competitors as partners

Associated Press

NEW YORK — One of the major aspects of being in business is trying to beat your competitors, right? Just like Coke vs. Pepsi and Ford vs. General Motors.

Maybe not. Perhaps you should be working with them.

Many small business owners are finding it makes sense to take rivals on as partners in some ventures — even projects they've just made competing bids for.

It's an idea similar to a general contractor bringing in subcontractors, said John Federico, president and CEO of The New Rules, a Maplewood, N.J., marketing communications firm. In his line of work, which involves graphic design and consulting, he sees plenty of business owners — called "free agents" — working alongside competitors. He does it, too.

"I may be pitching a bid for business for my company and a free agent does, too. I in turn, because of my relationship with the client or size, would actually secure the business. But I might actually call upon that free agent and say, 'Let's collaborate.' "

Richard Magid, who runs small-business support groups in New Jersey for Let's Talk Business Network, said companies sometimes find they don't have all the resources to do a job.

In such cases, turning to a competitor or competitors is a way to secure the deal and get it done.

The idea of sharing business with competitors might take some getting used to, but businesses that have done it find it has many benefits.

"It took a while to learn it — it doesn't happen overnight," said Mitchell Rappel, CEO of two Linden, N.J., firms, step2media and NuVision Graphics, "But we're in the 21st century and you have to work smarter."

Rappel said he also sees working with competitors as a way to broaden his company's talent pool.

"I have 14 people in house," he said. "With strategic partnerships, I have over 100 employees available to me."

Obviously, not every business lends itself to this kind of relationship between competitors — people involved in graphics and Web site design find it a natural part of their work, but other businesses might need to work harder to find avenues for cooperation. Still, there are possibilities — retailers, for example, might consider exchanging customer lists with competitors.

Ford and GM — who, it turns out, are partners as well as competitors — are among the founders of Covisint, an online auto parts marketplace that's also intended to be a product development site. The idea is to make purchasing and research and development more cost-efficient.

Clearly, working with competitors means tossing out the old "them and us" way of looking at business.

TAG Online, a Montclair, N.J., firm, has found several ways to work with competitors, even turning them into customers.

Amy Gideon, TAG's chief executive, said the firm wanted to design a new Web site for a client, but had to bid against an ad agency — and lost. But the agency had no experience with hosting Web sites and technical matters such as e-commerce, and so it turned to TAG for help.

"I didn't look at it as 'Why didn't I get it?' and get upset," she said. "I would rather have some of the business than none of the business."