Winning Together

I spent years thinking strategy meant building a stronger position than the company next to you. Then I learned that sometimes the better move is to stop competing and build something neither company could have built alone.

Overview

By the time the opportunity to combine with another company appeared, competition had become second nature. We knew our market, understood our advantages, and had built a company capable of standing on its own. The difficult question was not whether we could continue competing. It was whether continuing to compete was still the best outcome. The decision changed how I think about strategy, ownership, and what it actually means to win.

Category:

Shared Triumphs.

Published:

Jun 7, 2022

Updated:

Publisher:

Philip Cross

Reading

8 min

Series

Company

Updated:

Intoduction

For most of my early career, competition was something I understood in fairly simple terms. There was a market, there were companies in it, and the objective was to become the one customers chose.

That mindset is useful when you are small. It gives a team something concrete to rally around. You look at the alternatives, understand where they are stronger, find where they are vulnerable, and try to build something customers prefer.

But eventually, if you stay in a market long enough, the boundaries become less obvious. Companies that once looked like competitors start to look like potential partners. Products overlap in some areas and complement each other in others. Customers want capabilities that neither company can efficiently provide alone.

And a question appears that is much harder to answer than "How do we beat them?"

"What would happen if we stopped trying to?"

That was the question I had to take seriously for the first time. We had built a company capable of standing on its own. We knew our market. We understood our advantages. The difficult question was not whether we could continue competing. It was whether continuing to compete was still the best outcome.

The Competitor Across the Table

The company we eventually combined with was not some distant business we had only heard about. We knew them. We understood their strengths. They understood ours.

That was part of what made the decision difficult.

Competition gives you a convenient framework. You can reduce the problem to relative performance: better product, better distribution, better technology, better execution. A combination removes that simplicity. You have to acknowledge that the other company may possess something you cannot efficiently reproduce yourself.

It might be technology. It might be distribution. It might be relationships. It might be expertise that would take years to build internally. Sometimes the most strategically valuable thing another company has is not a product at all. It is time.

You can build almost anything if you are willing to spend enough years doing it. The question is whether those years are actually the best use of the company's resources.

We started looking at the problem differently. Instead of asking which company was stronger, we asked what the combined company could do that neither of us could reasonably accomplish independently.

The answer was increasingly compelling. That did not make the decision obvious. It made it worth having.

The Cost of Staying Independent

There is a natural bias toward independence in founder-led companies. You built the company. You chose the direction. You made the difficult decisions. The idea of combining it with another organization can feel like giving something away, even when the economics suggest otherwise.

I had to separate that feeling from the strategic question.

Remaining independent has a value. So does combining. The important thing is not to assume that independence is automatically the more ambitious choice. Sometimes independence protects focus. Sometimes it protects culture. Sometimes it protects a founder's control. But sometimes it simply preserves an organizational boundary that no longer reflects what the market needs.

We started mapping the two businesses together. Where did we overlap? Where were we duplicating effort? Where did one company's strength compensate for the other's weakness? Which teams would become more capable together? Which products could become substantially better?

The filter we kept returning to was the customer.

A financial argument for a transaction is not difficult to construct. Almost any combination of two viable businesses can be made to look attractive on a spreadsheet. The harder question is whether the resulting company becomes more useful to the people it serves. If the combination does not produce that, then you are mostly rearranging ownership — changing who controls what without changing what exists in the world.

That was not enough.

The strongest case was the one where the combination created capabilities that neither company could have produced as effectively alone. Not faster. Not cheaper. Actually different. That was when the idea stopped looking like an acquisition and started looking like a different way of building.

Giving Up Control of the Outcome

The strategic logic was only one part of the problem. The harder part was people.

Two companies do not become one simply because the spreadsheets work. They have different cultures, processes, assumptions, incentives, and histories. People have spent years building their own organizations. They have relationships and identities attached to them. Even a rational combination can feel personal.

That made communication more important than I initially expected. We had to be honest about what would change. Not everything could remain the same. Some responsibilities would move. Some processes would disappear. Some decisions that had previously belonged to one company would now belong to a larger organization.

There was no version of the transaction where everyone retained exactly the same role, authority, and certainty they had before. Pretending otherwise would have made the transition worse.

The goal was not to preserve everything. It was to preserve what mattered.

Culture is often discussed as though it is a fixed personality a company either has or loses. I think it is more practical than that. Culture is a collection of behaviors that people continue to reward — and more importantly, a collection of behaviors they continue to tolerate. Both sides of that equation matter.

A company that says it values speed but makes decisions slowly is not fast. A company that says it values customers but rarely talks to them does not. The combination does not change that arithmetic. If anything, it exposes it. When two organizations merge, the behaviors that survive are not the ones written in the values document. They are the ones that get rewarded in the first six months.

If the combined company wanted to remain ambitious, it had to continue rewarding ambition. If it wanted to remain close to customers, that had to appear in decisions. If it wanted to move quickly, the operating system had to allow people to move quickly.

You cannot preserve a culture by putting its values on a wall. You preserve it by deciding what survives the transition.

A Different Definition of Winning

The transaction changed something fundamental in the way I thought about competition.

For years, I had associated winning with relative position. If we grew faster, we were winning. If we took customers from a competitor, we were winning. If our product became stronger than theirs, we were winning.

Those measures are useful. They are not the whole story.

Sometimes the highest-value outcome is not taking something from another company. It is combining two sets of capabilities and creating something substantially better.

That requires a certain amount of humility. You have to admit that another company solved some problems better than you did. You have to accept that your organization is not the only possible vehicle for your ideas. And you have to be willing to give up some control over the thing you spent years building in exchange for a larger opportunity.

That is not an easy trade. It is also not a failure of ambition. In some cases, it is ambition expressed differently.

The most important strategic question is not always: "How can we become bigger than them?" Sometimes it is: "What could exist if we stopped treating them as them?"

Conclusion

I still believe competition is useful. It forces companies to improve. It creates urgency. It exposes weaknesses that internal teams can become too comfortable ignoring.

But competition can also become a habit. Once you have spent enough years defining yourself against another company, it is surprisingly easy to forget that the customer does not care which organizational boundary produced the solution. They care whether the solution works. That became the most useful lesson I took from the combination. A founder naturally develops an attachment to independence because independence is what allows a company to exist in the first place.

But independence is a means, not a principle. The same is true of control. The purpose of building a company is not to preserve every decision for yourself. It is to create something valuable enough that the decisions being made actually matter. Sometimes that means staying independent. Sometimes it means selling. Sometimes it means combining.

The difficult part is being able to evaluate those choices without turning the company into an extension of your own identity. I went into the process thinking we were deciding whether to compete with another company. We were actually deciding what kind of company could exist if we stopped thinking in those terms. That was a much bigger question. And it changed my definition of winning.

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The Company Changed After We Went Public

What Stayed the Same

Winning Together

Winning Together

Overview

Intoduction

Intoduction

The Competitor Across the Table

The Cost of Staying Independent

Giving Up Control of the Outcome

A Different Definition of Winning

Conclusion

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