Strategic Alliances with the Competition: Doyle Brunson, Ed Land, Steve Jobs, and Bill Gates

An important way to strengthen your own potential is to build alliances with your competitors.   In my business as a recruiter, I find that I can easily make five to six times more deals by working with other people, including my competitors.

Dealing with competitors requires skill.   However, exposing your business knowledge, coaching the competition, and participating in alliances with other business people can benefit you and your competitors and can build greater potential for large numbers of people to become more successful.

Working with your competitors:  When poker legend Doyle Brunson was writing his book on poker, How I Made Over $1,000,000 Playing Poker, Super System, one of his concerns was that he would be creating more effective competitors.  He would be teaching other players how to play a better game of poker and exposing all the methods he used to win money from the competition.

Brunson wrote the book.  It was a success.  Brunson then wrote Super System II.

Even though he comments in Super System II that he probably lost more money to other pokers players for what they learned in the two books than he made on book sales, Brunson has made a fair amount of money.

In writing the books, Brunson brought in famous poker players.  Each of these players wrote a chapter.  The writers competed with Doyle Brunson on the poker tables and perhaps for fame and endorsements:  Daniel Negreanu (“Kid Poker”), Chip Reese (generally considered the greatest poker player of all time), Jennifer Harman (highly versatile tournament player), and others.

Brunson not only made his competition better, but his books helped popularize the game itself, and today he is the largest icon in the history of poker.

When Brunson won his first World Series of Poker (WSOP) title, there was one tournament that had a couple of hundred players.  Today the World Series of Poker has over 100 tournaments in the United States (WSOP), Europe (WSOPE), Asia-Pacific (WSOP APAC), and Africa (WSOPA).   The World Series of Poker consists of close t 100 tournaments and internationally includes over 80,000 registrants.

There is a difference between fighting with your competitors and competing with your competitors.   In 1976, Eastman Kodak was a company that made film for photo exposure and commercial processing.   During that year, Eastman Kodak introduced an instant camera.

Eastman Kodak was larger than Polaroid Corporation.

To Polaroid Corporation and especially to Ed Land, the founder of Polaroid Corporation, the Eastman Kodak instant camera product must have created anger and exasperation.  Polaroid depended on the instant camera as its primary source of income.  The Eastman Kodak pictures were very similar to the Polaroid pictures.  The film packs and the roller process seemed the same.

Polaroid chose to fight Eastman Kodak by suing Eastman Kodak over patent issues.  After perhaps a decade, Kodak and Polaroid reached a settlement.  Eastman Kodak discontinued manufacturing and selling instant cameras as well as the film for the cameras and offered to buy back Eastman Kodak instant cameras from consumers.  There is a bit of information about the case including a copy of the settlement on the Internet.

During the period that Eastman Kodak manufactured, advertised, promoted, and sold instant cameras, Polaroid grew rapidly.  When Eastman Kodak entered the instant camera industry, Polaroid’s annual revenue was $650 million dollars.  Three years into the competition, Polaroid’s annual revenue was $1.3 billion.

In 1978, which was the third year of competition between Polaroid and Eastman Kodak, Polaroid’s One Step Camera was the leading selling camera in the world.

Eastman Kodak as a competitor helped Polaroid in three ways.

  1. Kodak’s advertising and promotion created greater consumer awareness of the instant camera.
  2. Polaroid became a more creative advertiser.
  3. Polaroid aggressively created new cameras and film to compete with Eastman Kodak.

After Kodak lost the patent suit and quit making instant cameras, Polaroid never again grew the way it did during the first three years Eastman Kodak sold instant cameras.

With perhaps hindsight, a brilliant business person could have seen Eastman Kodak as a competitive ally and embraced the arrival of Eastman Kodak, perhaps with some negotiation over license agreements.  This approach may have enabled Polaroid to spend more time creating new products for greater successes.  This period was one in which Polaroid needed to focus on the arrival of digital imagery and not having distracting legal issues.

Yet Polaroid spent 10 years fighting with Kodak before reaching a settlement and pushing Kodak out of the instant camera business.

Steve Jobs and Bill Gates were able to work our resolutions to end fighting and creating a successful competitive alliances.  There are accounts of Microsoft investing $150 million in Apple in 1997.  Microsoft also signed agreements with Apple that year to develop Word and Excel for future versions of Apple computers.

Some of you may remember, as do I, the news accounts of Steve Jobs presenting these agreements to share holders.

I remember the dismay that Apple loyalists expressed when Steve Jobs announced that Apple had formed alliances with Microsoft.   The competitiveness between the two companies infected the shareholders and the owners of Windows-based computers and Apple computers with a kind of personal rivalry for the two companies.

The alliance ended years of bitter rivalry and lawsuits between the two companies and helped set Apple miles ahead on its road to recovery after Steve Jobs return to the Apple.

Although the two companies are competitors and Apple has even introduced apps to compete with Microsoft apps, the two companies keep up alliances today.

 

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