The intuitive answer is market share. But perhaps there’s another way of looking at this: one that is increasingly being pursued by brands with a strong purpose agenda. If your brand must be bigger than what you make, perhaps the basis on which you compete must be greater than what you can distinctly own.
Recently Tesla announced that it was removing its patents and that it would be pursuing an innovation program based on open source. The reason? Because the very mechanisms intended to protect the company’s investments were going to prevent it reaching its ultimate goal. From Eion Musk’s post: “Tesla Motors was created to accelerate the advent of sustainable transport. If we clear a path to the creation of compelling electric vehicles, but then lay intellectual property landmines behind us to inhibit others, we are acting in a manner contrary to that goal … [When Tesla started] we felt compelled to create patents out of concern that the big car companies would copy our technology and then use their massive manufacturing, sales and marketing power to overwhelm Tesla. We couldn’t have been more wrong … Our true competition is not the small trickle of non-Tesla electric cars being produced, but rather the enormous flood of gasoline cars pouring out of the world’s factories every day.”
What are you really competing against?
If you’re a car maker and you view your competition not as other car companies but rather as the reluctance of all car companies to pursue the goal you are most committed to, that represents a fundamental shift in the nature of what you compete for. The competitive dynamic is less about a race to a singular point of advantage and much more about the pace at which you and those around you make fundamental changes in the suppositions that govern, and limit, adaptation in your industry.
Competitiveness in this context is less about having more of the pie and more about redefining what a pie is
Chris Wren was talking about this in a conversation recently. This open source way of thinking, he suggests, has huge potential to change the world. In a way, he observed, Uber is open source entrepreneurship, as are many of those working in the collaborative economy, because the brand is giving up ground it would once have sought to control in order to rewrite the rules. They want a piece of the pie, but first they want to change what a pie is – or could be.
Most brands compete for what they know against who they know for a prize they think they all understand – which means all the focus is on achieving a greater level of profile and presence within a sector that is both constrained and crowded. They compete as the brand they are known for today, for the prize that they want to be known for today and against measures that focus on what they are doing today.
But as Chris pointed out, Tesla’s decision is less about how the carmaker uses what it knows and owns exclusively to compete against traditional makers, and much more about encouraging new possibilities that lead to increased participation overall. Tesla, in other words, appears to be making an organic market growth play – transforming what it can achieve by changing the technologies that it gets to play with and therefore where it might get to play with them.
When you stop thinking of competition as a take-what-we-can struggle, and start thinking about your competitors as colleagues grappling with the same issues as you, it strikes me that there are real opportunities to agree common goals that benefit all. Imagine for example if the large fast food companies could lower their walls far enough to share their collective IP to address societal concerns around obesity. If the global carmakers had worked together to agree how to lower emission levels, could the sector have prevented the VW scandal that now has car owners all over the world asking themselves questions about the wider industry?
We used to think that when one brand knew something that another didn’t, they held a competitive advantage. Musk’s initiative raises a question that is all too frequently lost: what wider change do we all want to see happen? I’m not for one moment suggesting anti-competitive behaviour or cartel formation. I am suggesting that there are issues where consumers want to see change that, if they were answered together through co-operation, would enable a whole industry to compete on a new basis. Or perhaps, for some incumbents, that thought is even more scary than keeping themselves to themselves …?