From the April 2000 issue of Entrepreneur

The fresh-faced teenager in the McDonald's commercial might be smiling and seem friendly, but fast-food legend Ray Kroc once said, "If I ever saw a competitor drowning, I'd put a live fire hose in his mouth."

Don't judge the late Ray Kroc too harshly. He was speaking of an age-old tradition. Entrepreneurs have always trounced the competition, and it hasn't always been pretty. in the 1800s, John D. Rockefeller made Standard Oil company into a monopoly, controlling 90 percent of the oil market, by negotiating secret rebates with railroads, bribing Congressmen and committing industrial espionage. About the same time, in England, the United Kingdom Telegraph Company hired men to cut down the poles of its rival, Electric Telegraph Company. As that century closed, newspaper baron William Randolph Hearst helped start the Spanish-American War to sell newspapers and crush his competition. More recently, Microsoft has been in the news facing accusations of using unfair business practices in an attempt to build its own monopoly.

But while entrepreneurs have always been against the opposing team, the way we're competing is changing. "Competition isn't as cutthroat as it used to be," observes Roger Nagel, a professor at Lehigh University in Bethlehem, Pennsylvania, and co-author of Cooperate to Compete: Building Agile Business Relationships (John Wiley & Sons) and Agile Competitors and Virtual Organizations: Strategies for Enriching the Customer (John Wiley & Sons). "When you're finished with your competitors, you no longer have to see them lying on the ground."

And as competition evolves, entrepreneurs like Leon Richter are actually finding they enjoy it. Call it the thrill of competition-it's a rush; it's a natural high; it's the kick you get making a deal before your nemesis does.

Richter, 29, is the CEO of Justice Telecom, a $100 million telecommunications solution provider based in Los Angeles that competes for shares of the overseas phone market in places like Scandinavia, South America, and the United Arab Emirates. To hear Richter tell it, his company is a dinghy competing against the ocean tide, but he nevertheless wakes up in a good mood every day. "It's absolutely a thrill," says Richter of competition. "It's a huge motivation for us."


In the competitive world of journalism, Geoff Williams is a frequent contributor to Entrepreneur and a features writer for The Cincinnati Post. He recently saw his first feature in Ladies' Home Journal.

The Thrill?

When Jim Geary is interviewed by a reporter, the question always comes: "Who's your competition?"

Geary looks at the reporter . . . mulls over the question for a moment . . .
wonders why he should give his competition free publicity-then he lies. He names his fourth and fifth competitors as the guys he really needs to beat. Then if the reporter asks about his actual top competition by name, Geary waves them off with "Oh, we don't really compete with them."

Geary, 43, is the CEO of 2-year-old SHYM Technologies, a Needham, Massachusetts, company that provides security software for companies that handle financial transactions through their Web sites. "I think people thrive on it," he says of competition. "People enjoy it because it validates their strategies. It helps validate the thinking or the insight that they had, and with that comes a heck of a lot of satisfaction-and, of course, market success."

But Geary draws the line at calling competition "a kick." And that's understandable, according to Gary Cadenhead, a senior lecturer on entrepreneurship at the University of Texas, Austin. "I've never heard an entrepreneur jump up and down and say, 'Hey! We've got competitors,' " Cadenhead says. "It's not something anybody's going to think is great. That said, it's a reality, and, once the reality is there, it's like any kind of athletic event where there's a thrill. There's an excitement in giving your best and seeing how that compares with somebody else's best."

But Michael Morris, director of the entrepreneurial center at Miami University in Oxford, Ohio, doesn't see competition as ever creating much of a rush for entrepreneurs. "Like most people," muses Morris, "entrepreneurs are strong believers in competition and see the value in it-as long as it isn't for their business." Still, he concedes that many entrepreneurs recognize that competition has benefited both their businesses and their customers: "In terms of pricing, it keeps them honest."

And if you're wondering who Geary's competitors are, don't bother. He wouldn't tell us.

Party In Private

We'll never know whether Geary dances in his underwear through his house-á la Risky Business-or Richter screams "I'm da man" after scoring a big deal. That's for them to know and you not to find out. As Richter says, "If my company were an athletic team, when we score, we would try to make it look like we've done it before. We're not the kind of people who do an end-zone dance."

If anybody had an end-zone dance coming to him, it was Jim Heckman when he inked an exclusive deal with Fox Sports to broadcast their events on the Internet. Heckman's Seattle-based company, which, as things would have it, is called Rivals.Com, trumped numerous competitors, including ESPN.com (which is owned by The Walt Disney Company, probably the biggest competitor of all). Nevertheless, Heckman, 34, who once sold his car to start a football magazine, says he had no time to celebrate. "We raised a glass of champagne," Heckman says. "Then I jumped on a plane. That was the celebration."

But when pressed to admit whether he allowed himself to shout "Yee-haw!" in the privacy of his own home, Heckman dodges the question with an explanation of how he felt raising that glass of champagne: "What you really feel is relief, and all of the concern you had felt leaves."

"Your excitement is short-lived," adds Geary, "because as soon as you sit back and bask in the glory, your competitors are making their next move."

Competition Grows Up

Nagel, who travels the globe speaking and consulting on the topic of competition in the 21st century, imagines a Competition Utopia, a land with "no winners and losers," a world in which competition and cooperation go hand in hand and you send care baskets and thank-you notes to your competitors rather than dream about seeing them wearing rags standing in the soup line.

And that vision isn't a view through rose-colored glasses. According to Nagel, it's already happening. Flip through a magazine, he says, and you can see Motorola promoting a Palm Pilot. One World and Star Alliance, Nagel points out, are agreements among individual airlines to cooperate with each other, to help foster smoother flights for their customers.

Somebody, of course, has to make money, and somebody else is going to lose it. But Nagel says the future mind-set will be: "I'm not really willing to backstab you; I'm willing to beat you. But I don't want to do anything that will make me morally unacceptable to be a partner, because I may want to partner with you tomorrow."

Richter echoes that sentiment. "We're on very good terms with competitors who are like us, upstart companies. It's really the entrenched incumbents that tend to resort to either unfair practices or who are dismissive with us. People are in your corner, and they help you out. It's not a zero-sum game."

Watch Your Back

But even if competition someday becomes fun for everybody, it isn't going to go away. Ask Richter, who's constantly reminded that if he wants a market share, he going to have to fight for it. Richter recalls that in his company's early days, while attending a conference in a posh hotel in Santiago, Chili, he happened to spot an executive from one of his chief rivals, Telefonica, which provides telephone service to one-third of South American homes. Richter walked up and introduced himself as the CEO of Justice Telecom.

"Bah, Justice!" spat the rival. Surprisingly, the executive didn't twirl a handlebar mustache as he walked away.

"The dismissive [competitors] are the ones we go after first," says Richter. "It helps fuel the fire."

And if you can't hack the competition? Here's Geary's advice: "Get out of the business and move on."

If that seems harsh, Geary explains his thoughts this way: "There are a lot of guys out there who really get depressed, and have their businesses suppressed, because their competitors have put them in a box. If you can't enjoy the work, and it starts to take a toll on you mentally or physically, maybe it's time to do something different. That's what's great about living in this country. We have lots of opportunities, and people don't choose that opportunity enough. Not that you have to succumb, but maybe you aren't the best person to fight the battle."

Tough love from Jim Geary, someone who sincerely cares about your well-being. Or maybe not. Maybe Geary is only offering the advice because he wants you out of the game. After all, who needs the extra competition?

Contact Sources

Justice Telecom, (310) 526-2000

Roger Nagel, fax: (610) 398-1220, roger.nagel@lehigh.edu

SHYM Technology, sales@shym.com, http://www.shym.com