We live in a highly competitive world, as one would expect as a result of some of our capitalistic values. “Let the best business win” is often the unspoken motto by which we live. Anyone who has taken a basic economics course knows that for the most part, competition is good for the consumer. It protects them from overpaying, as what often happens in a monopoly. I respect this unwritten rule for the most part. I don’t want to pay $20 for a hamburger at a local restaurant. While I don’t consider myself a businessman, the truth is that I have become one in many ways. I manage a blog, but I also earn a few extra bucks doing so. I also do a few odd-jobs online that earns me a little extra income.
While I have come to embrace capitalism and the ongoing competition of businesses, this is not to be confused with the ends justifies the means. There are many practices that businesses take that I am not okay with. While many of them are often difficult to detect in corporate america (unfair wages, sweat factories, unnatural chemicals in food, etc.), I have personally experienced one that I personally would deem a “malpractice” and figured there was no one better if I am over-reacting to ask than my readers. Before I ask your opinion, let me fill in you in on the details without naming names.
Is It Okay to Compete with Your Friend’s Business?
While I don’t have any formal training in business, I do have enough practical experience to know when something is just not right. There are many great examples of blurring the lines of ethical business methods, but the one that I want to talk about is this: Using Someone’s Service Only to Compete Directly Months Later.
This one is a personal pet-peeve of mine. Would you ever think of going to a chiropractor to get adjustments to your back, become friends with him by all standards, ask him how much he charges, take a copy of his registration form, learn his system in and out, and then start your own business using the exact same business model in the same market, directly competing with him? I understand the desire to make a living, but there’s a crucial difference between doing your own market research and using your “friend” to do all of the legwork for you.
While this may be perfectly legal, it a huge slap in the face with the person you were supposedly friends with. It’s a great example of when greed overrides the moral compass. Friends don’t directly compete with friends’ business – it’s that simple – or so it seems to me.
This is something that I have always stood by. While I understand the basics of a free market, I also strive to be a person who does not take away business from those who have helped me for years. A great example of this is when I started my own business back in October 2011, almost two years ago. There was one other person who was offering these services in my niche that I knew of and I knew that I didn’t want to directly compete with her. More importantly, I knew that I could offer better services that would blow the competition out of the water, while keeping the price the same. I wanted to make a profit, but I didn’t want to hurt her business – and that’s the truth of it.
To accomplish both (earn some money, while not directly hurt her business), I figured the best way to offer the same service without taking her income was to do the following:
- Never take her clients. To contact her clients directly and ask them to try my services would make me the bad guy. I knew this was a line I wasn’t willing to cross. In fact, I turned away people who were her clients and told them I didn’t feel comfortable asking them to switch services (after learning they were her clients).
- I accepted slower growth in order to preserve my reputation. I knew that treating others fairly would work in my favor. It did mean less money, but I accepted this.
- I did my own market research and offered new features. The last thing I wanted to do was to be seen as copying her. I created a new system for collecting client information, and offered cool features that made the lives of my clients easier. It meant extra work for me, but it was worth it if it meant I would grow my business. It also meant that my business model was almost entirely unique.
- I talked to her directly, telling her my honest intentions. I didn’t want to be seen as the bad guy, even to her. Even if I was accepted as just another business trying to seek out honest business, I knew that this was not the niche to make enemies. We never were really close friends, but we respected each other and the other person’s business. We also knew that what we did took a lot of time and there were enough clients for both of us.
After nearly two years, I have had some decent success. I will never make a living off of this service, but enough to eat out once or twice a month. It’s not a lot by any means, but it is something that I take pride in. I take pride in being the go-to guy. After entering the market in what I see as an honest and patient way, it paid off. My competitor got busy with other services and even sent some of her clients my way. I bet you don’t hear that happening in the business world very much. I work to earn the little extra income that it produces – and now I have been slapped in the face by one of my own clients. I guess it was only a matter of time before I had some competition.
How to Deal with Getting Burned
There are many ways to react when you are directly affected by someone you trusted. You can get angry, call that person names, seek revenge, or you can live with it and continue to do what you do so well. I’ve chosen the latter. While part of me is hurt that someone would use my services and then create their own using many of the systems that I personally created, the other part of me understands that they are just trying to make a little extra money. I don’t hate them – but I do wish they went about it a little differently. But, that’s just me. (or is it? Tell me if you think there is anything wrong with using a friend’s ideas to compete with them in the comments below)
Instead of seeking some sort of revenge, I know that I have the upper hand. I’ve been in this business for nearly two years and I don’t plan on going anywhere. I know what works and what doesn’t, and I have a few more ideas that I can implement to make things that much better. I’m not going to let a little competition stop me from offering a valuable service to my clients.
Readers, I really do want to hear your opinion. This post was not meant to be pointing the finger, but to initiate a conversation on the topic at hand, so let me know what you think.