Harvard Business Review LogoRival companies should team up to build the market while working independently to own it. by Frank NagleChris AuldCompanies don’t win by isolating themselves, but they don’t win by overcollaborating, either. The real advantage comes from knowing what to build together and what to keep forEvery summer the Tour de France turns endurance into theater. For three weeks the world watches cyclists traverse mountains, windswept flats, and chaotic city finishes. If you want to see strategy in motion, watch the peloton. Riders from different teams—direct competitors with different sponsors, leaders, and ambitions—form a dense, fast-moving pack. Inside this temporary, informal alliance, everyone benefits from reduced wind resistance. The front rider does the most work as the riders behind conserve energy. Positions rotate. Over time the group moves faster than any rider could alone.
Collaborate on the Core. Compete on the Edges.
Companies don’t win by isolating themselves, but they don’t win by overcollaborating, either. The real advantage comes from knowing what to build together and what to keep for yourself. It makes sense to collaborate on the “core”—things like infrastructure, standards, and trust, which allow an ecosystem to function—and to compete on the “edges”—those activities that allow companies to differentiate themselves. This article introduces a practical framework leaders can use to determine the right collaboration strategy. It includes five factors: market dynamics, technology life-cycle stage, your position in the technology stack, the level of competition, and social acceptance and regulation. By weighing each factor, leaders can devise a collaboration strategy that grows the market without giving away their edge.
