For many entrepreneurs, business is a zero-sum game. You made a sale? I lost a sale. You landed a customer? I lost a customer.

All-out competition is a basic tenet of American business. For example, when General Motors made over 50 percent of the nearly eight million new cars sold in 1955 (doubling Ford sales and tripling Chrysler sales) CEO Harlow Curtice kept pushing hard -- so hard that "the boss says we're still losing five out of ten sales" was an inside joke at GM (while helping to define the GM company culture).

But even though you often compete for the same customers, revenue, and profits, are there times when it make sense to work with your competition instead of against them? Are there times when co-opetition, not competition, is a smart move?

Absolutely.

Take Amazon. Amazon Marketplace (now better known as Fulfilled by Amazon) brought third-party sellers into Amazon's own online store.  While that move sparked debate within the company, today FBA accounts for over 50 percent of Amazon sales and is a centerpiece of Amazon's incredibly successful co-opetition approach.

Of course, you don't have to take it that far.

We've partnered with competitors at LogoMix. While we compete with Weebly for customers, we've also partnered with them because, in the end, doing so created a win-win. The same was true with GoDaddy. Though we compete for the same customers, we formed a brief partnership. Why? Because sometimes a rising tide really does float all boats.

We considered partnering for an inner-city youth technology challenge. And while we haven't joined together yet with others in our industry, ( because net neutrality laws that favor bigger companies will negatively impact our small business customers) we are eager to find ways to do so.

So how can you work with your competition in a mutually-beneficial way? Here are a few options:

Join together to support a charitable cause.

This is the simplest way to collaborate rather than compete -- with the added bonus of helping those in need.

Join together to enter a new market.

You make great trucks. A competitor makes great hybrids. Together you develop a hybrid truck. Sound impossible? It's exactly what Ford and Toyota did with the Atlas Ford F-150 Hybrid.

Join together to create economies of scale.

Do you regularly purchase a commodity that your competition also uses? Combining to purchase at higher volume levels creates cost savings for both you and your competitor.

Join together to cross up-sell.

This strategy works especially well in retail or consumer good environments, but also with tech products and services. You provide a foundational product or service and then sell add-ons made by others while keeping a percentage of the revenue. Your offerings naturally expand -- which allows you to better service your customers -- and your competition benefits from incremental sales growth.

Still not convinced? Try this:

Join together with a complementary business.

If you still can't imagine partnering, in any way, with your competition, start by partnering with complementary businesses. If you sell building supplies, refer business to great contractors in your area. If you're in web design, refer customers to great web hosting services. You can do so informally or as a more formal partnership where the referrals are two-way. Find a business with different products or services and similar customer profiles, and partner up.

Of course you'll need to be careful. If quality is your main point of differentiation, don't partner with a competitor that might put your reputation in jeopardy. And make sure the collaboration is truly mutually-beneficial. Co-opetition should always be a win-win.

But if you're struggling to grow, if you're struggling to make inroads into your marketplace, don't just try to win business away from the competition. Sometimes the best approach is to work together, especially if doing so results in helping to grow a market for both of you.

Published on: Sep 25, 2018