The Cookie Conundrum:
Competition vs. Collaboration
When deciding whether to beat ‘em or join ‘em, the decision often comes down to what you are trying to accomplish as an organization. Case study: the town of Cookieville, whose inhabitants make, you guessed it, cookies.
Crunchy Cookies, a for-profit cookie company, wants to create the most cost-effective crunchy cookie to satisfy its target market. People pay to eat its products because it makes damn good cookies.
The Cookie Coaches, a for-profit social enterprise, hires at-risk youth to make its cookies, helping them become productive members of society. Like Crunchy Cookies, its money comes from the cookie-consumers, but its success hinges on its vision of social change rather than just the quality of its products.
The Consummate Cookie, a non-profit, accepts donations from the citizens of Cookieville for the research and development of the most perfectly-textured, awe-inspiring, tear-jerkingly delicious cookie known to humankind. Its money comes from people who believe in its mission, even though they may not benefit from its services. (Keep in mind, folks, non-profit is NOT synonymous with charitable, and this misconception has led to the formation of some interesting organizations.)
The three companies chug along happily, until, dun dun dunnn, competitors arise for each of our protagonists.
Crunchy Cookies now has to compete with Chewy Cookies, which capitalized on the demand for chewy cookies following Miley Cyrus’s Tweets endorsing them. Crunchy Cookies goes into attack mode, creating an entirely new line of flavors and textures to reengage its customers. The epic cookie competition leads to a new era of cookie sales, with more innovation and creativity in the cookie industry than ever before. In conclusion, competition in the for-profit world gets two giant Facebook messenger thumbs up. (If you are interested in reading about how Richard Branson has fun with his competition, how competition sets up startups for long-term success, and how competitors can lend credibility to your idea, there are petabytes of articles available to reassure you that an overcrowded market actually bodes well for startups.)
The Capstone Cookie pops up to try and find the perfect chip:dough ratio before The Consummate Cookie can identify the ideal cookie-baking temperature. Funding is sparse, and both non-profits spend more time and resources applying for the same grants and accosting the same donors for more money. There is only $100,000 available for cookie research, and both organizations find their operations slowing down while trying to make the most out of their $50,000. Competition? Bad. Collaboration? Good. The organizations benefit more from working toward a common goal together than they do from spending resources to take the other down. In the end, does it matter who develops the ultimate cookie?
The Cookie Coaches survives most of the wreckage surrounding all of this competition, since people still buy its yummy feel-good cookies to support the town’s troubled teens. However, it goes head to head with The Cookie Collaborative, a social enterprise that spends 30% of its income on programs inspiring children to create their own cookie recipes.
Now things get tricky. In the short-term, collaboration can be great. With a few creative marketing campaigns, the companies can unite to maximize their impact. Buy the new Collab Cookie, and you support the employment of today’s youth while fostering the creativity of tomorrow’s innovators. In the long-term, however, trying to accomplish too much can result in less impact; sending an inconsistent message to your supporters can decrease funding, and distributing your resources across these goals can decrease your effectiveness. Focus your resources on one vision to maximize impact. After all, it is better to eradicate one disease entirely than to attempt to cure ten.
On the other hand, competition in the social innovation space can bring both the innovation benefits of for-profit competition and the financial instability of non-profit competition. Social entrepreneurship is a spectrum, with for-profit and non-profit organizations at either extreme. There is no cookie-cutter rule for determining when to compete and when to collaborate, so let’s discuss strategies instead. What can we learn from The Tale of Two Cookies?
Lesson Number Two:
Compete only if the competition pushes you to reach your goals.
In other words, compete to sell more cookies only if your mission is to create the most-<insert metric> cookie on the market, and the competition improves your product. An eco-friendly cookie company might challenge itself to create the most cost-effective cookie with the lowest environmental impact, for example. If your goal is to maximize the number of cookie-making lessons administered to homeless veterans, however, your efforts may be better spent improving an existing baker education project than starting your own.
The most difficult part of this lesson is learning to swallow your pride. Don’t let your ego interfere with the goal that you are trying to accomplish; founding a company is a means, not an end. Contrary to popular belief, it is sometimes better to be the little fish in a big pond than the big fish in a little pond. To put it another way, would you rather be a well-oiled cog in a functional tractor, or the steering wheel of a broken one?
If you found this post interesting enough to make it all the way down here, check out the rest of my series on social innovation, and come back next week for tips on building the dream team.