Hardware and software. Digital cameras and color printers. Peanut butter and jelly. Some products are just better together.
The same goes for businesses. Competition—beating your rivals and grabbing the most market share—is often the dominant mindset for the business world. But it can pay to partner.
A century ago, for example, top automakers of the day, along with a major tire company and a maker of headlights, formed the Lincoln Highway Association to encourage development of the nation's first coast-to-coast highway.
Fast forward to today, and big companies are still leaguing up, often with the benefit of collaboration technology. Recently, some of the nation's largest companies have been partnering up with each other on blockchain-based networks.
In this economy, people understand you need better economies of scale if you are going to survive for the long term.
—Greg Brodsky, founder, Start.coop
Enterprise blockchains—a kind of distributed database with cryptographic security—allow companies involved in a supply chain or business ecosystem to share information while protecting sensitive or proprietary information. One example is FoodTrust, a blockchain network linking retailers, growers, processors, wholesalers and distributers of produce. By sharing information on a blockchain network, the companies have reduced the time it takes to track down the source of food-borne illness from several weeks to a matter of seconds. That not only helps the companies, but can save lives.
Collaboration is not just for large corporations. It can be especially powerful for small businesses.
Cooperatives have long known the benefits of teamwork. These democratically owned and governed businesses are organized around the interests of a particular group, whether consumers, producers or retailers.
From bakeries to bike stores and hardware to health care, cooperatives and purchasing groups are helping to level the playing field for independent operators, notes Greg Brodsky, founder of Start.coop, an accelerator for cooperatives, as well as the founder of a purchasing cooperative for retail bicycle stores. “In this economy, people understand you need better economies of scale if you are going to survive for the long term," he says.
Katrina Scotto di Carlo calls it “hacking scale." Scotto di Carlo is a co-founder of Supportland, a Portland, Oregon-based company that offers a digital loyalty program aimed at Main Street businesses. Rather than each operating their own loyalty program, Supportland lets customers earn rewards and use them at any participating businesses. That opens up opportunities for businesses to partner for mutual benefit.
Scotto di Carlo cites one example, where a toy store and a bakery in the same town shared a similar focus on serving local families. As a reward to customers, the toy store offered a digital token via the Supportland app which was good for a free chocolate chip cookie at the bakery. Not only did that endear the toy store to its customers, it encouraged them to visit the bakery.
The results were eye-opening. A year later, customers that were offered the cookie visited the toy store 40% more often than the store's average customer. Perhaps more surprising, the customers that redeemed their chocolate chip cookie at the bakery had a 23% higher retention rate than the bakery's non-cookie rewarded customers. These first-time customers turned out to be some of the bakery's best customers.
“When two small businesses collaborate like that, it engenders a visceral feeling of community," says Scotto di Carlo. “The emotional resonance is what makes collaboration so successful on Main Street."
So whether you're a big business or small, instead of just thinking about beating your rivals, consider how you might partner.
Photo: Getty Images