Why Are You Hiding?

You have probably at some point in time heard the well known saying from ancient military strategist Sun-tzu keep your friends close and your enemies closer. It is one of those at first counterintuitive sayings that makes little sense but becomes clearer and clearer upon increased reflection. Those who struggle with the meaning tend to conclude that "close" implies spending time with both in a similar fashion. It doesn’t. The saying simply reminds us that our friends we can trust, we can give them latitude. Our enemies on the other hand are in theory looking out for a self interest which conflicts with ours. As such, it behooves one to have a keen perspective of their current and future intentions if we want to maximize ours. That behavior takes on a particularly unique affectation in the online advertising world in the form of the now mainstream term "coopetition." Whether an ad network that buys from another network or a lead generation company that in effect pools its buyer base with another to maximize coverage, the result has two companies at odds with one another having to cooperate if they both want to survive. Getting there though, each wonders if this is the case of the getting asked to give a scorpion a ride across the river only to still get stung after.

We see coopetition play out in many ways. Being in the midst of Adweek in NYC and having just finished ad-tech London; we are reminded of a form of coopetition that takes place at trade shows – in people’s decision to both attend but more noticeably in their decision to speak. Not everyone likes to speak in front of a crowd but almost everyone will get on stage if given the chance. Granted, the more senior the figure, the more senior and/or exclusive the stage they require. At the Wall Street Journal’s All Things D tech conference they will attract everyone from Bill Gates to Mark Zuckerberg. Those connected enough to attend the Allen & Co retreat in Sun Valley will experience the same in a more exclusive and intimate setting. In other words, almost everyone will participate in a relevant forum. We see this from talk shows to the UN. Even Warren Buffet does it and quite candidly. Despite such high level participation from business leaders to international leaders, almost everyone can still name someone who seems fundamentally opposed to the idea of joining the public discourse, one who doesn’t cooperate with their potential competitors for belief that disclosing anything tends to benefit others more than themselves. Is there really such a thing? What does it mean if someone doesn’t want to disclose at any level especially on a general level, i.e., metrics, names, or other personally identifiable business information? Here is what we seem to find:

• Super early stage company – this is the classic pre-revenue, pre product play, the idea in mind that feels so empowering so full of potential that just discussing any piece threatens its fabric of existence. Not sharing here is more of a mental barrier than real barrier. We have all been there, feeling a type of enthusiasm about perhaps having hit on something. Movie studios are a great example. Guarding their stories as tightly as possible lest someone else beat them to the punch with a similar story. What they admit by this behavior is that they have a potentially undifferentiated product, that many others could do what you do. On the other extreme, if you are trying to create a new power grid for electric car usage, that you share, because while the idea isn’t new, it takes such a level of execution to make it beyond daunting. I think of companies like Billshrink who have a good idea and are vocal. They know their execution ability makes them able to talk earlier in the prod life cycle than others.
• Early stage company – speak to a company just getting going, even one with a multi-million dollar run rate and many will turn mute when asked a work related question in a threatening environment, which can be anything from a blogger to a panel on stage. Their silence makes sense for a certain type of company. Usually they have started something but haven’t hit scale. Like many super early companies the idea and execution of that idea can happen in the hands of too many others. Until they have built up some defensibility they don’t want to invite competition. Were that incumbent to learn that the idea works they might chose to apply their resources to it. This isn’t exactly what happened with Internet Explorer crushing Netscape but the results illustrate the worst case fears of the business owner.
• Late stage dominant player – not sharing for early stage companies has reason and usually it acts as a litmus test for some early indicator of value. An undifferentiated idea and execution doesn’t inhibit ones ability for growth but it does tend to mean that until the company hits scale the business is under constant threat. What happens, though, when the company hits that scale and doesn’t have to worry about someone else coming along and dominating its business model. Should they feel as though participating in industry discussions somehow lifts others while doing nothing for themselves? Do they feel somehow better than everyone else and as though they could only contribute and not learn? The answer is unfortunately yes, and of the three stages here, this is the scariest of them all. When a company that has reached a foothold and overall level of experience doesn’t participate because they feel others would benefit more than themselves, they have reached a level of complacency which only indicates their actual level of misunderstanding. It’s this last group which scares us the most when it comes to trying to make us all better, the one who feels they know what they need and can’t learn from the interactions of others. At least the others had a reason to not engage in the dialog, regardless of its implications to their business. Not participating here is much worse because it is the first sign that someone more connected can come and eat into the business.