It takes a community to build a business

Consider collaborating with your competitors to add value to your entire industry

In popular culture, the image is common: a lone wolf CEO rises to the top of a competitive field by sticking to his guns and following his instincts. In reality, businesses are made from networks, the result of the collaboration between partners, advisors and distributors.

The social innovation practice at MaRS is embarking on a new project designed to help companies leverage contacts in their field to scale their businesses. The idea is to make efficient use of distribution channels, manufacturing capabilities and networking partners.

Every advisor at MaRS will tell you that the core to a successful business model is a clear and concise value proposition. If we take a step back and look at the value proposition of a sector in aggregate, certain commonalities emerge that help us evaluate points of collaboration between traditional competitors.

The mantra of “compete, differentiate and repeat” has been a popular mode of thinking for the best part of the 20th century. In our new economy, open-source models and creative collaboration are needed to keep up with an ever-demanding customer base.

Industry organizations realized this long ago and encourage members to pay into a fund that creates advertising for general products to help lift the entire market. The “Get Cracking” campaign by the Egg Farmers of Ontario has served to increase egg consumption. It doesn’t do the egg farmers much good to continually compete with each other and work in isolation to build up their distribution channels.

Similarly, video game companies don’t negotiate distribution channels independently anymore, but through a network of middle players such as Solutions2Go in Mississauga who facilitate the relationship between game producers and retail outlets.

Many of the companies our social innovation practice works with are focused on selling and distributing educational products and services to Ontario’s classrooms. Their motivations are wide-reaching: fostering literacy, increasing civic engagement, empowering bullied students, even training the next generation of musical prodigies.

That said, they all encounter the same challenges of negotiating distribution channels in a large and unwieldy public service. They must also tailor their value propositions to the different stakeholders in the system: parents, teachers, principles, superintendents and the students themselves.

Instead of advising them all separately and repeating the same message about finding channels into classrooms and booking meetings with Ministry of Education representatives, we are seeking to push them all in the same direction of becoming advocates for investment in educational products in Ontario.

Many of the companies can benefit by sharing channels, or benefit from an info session with the Ministry where several educational companies pitch their goods together. Although the companies still need to impress their investors, many of them can do this by collaborating with their competition instead of hiding from them.

Think about the big players in your field and who you can latch onto to scale your company. You don’t have to be the lone wolf to be a big player. In fact, “collaborate and conquer” might be a better mantra for the 21st century.