Working with competitors…

Over the last several months I have worked feverishly to further educate myself in the area of performance and system tuning to overcome server issues and improve our customers satisfaction and hosting experience. As the President of Bluehost.com my responsibilities normally take me far from the technical issues that I normally love to work with but lately I have felt that some things are simply best done yourself. In this case it has paid off handsomely as our server loads have dropped considerably and server speeds are now faster than they have ever been before.

The thing that surprised me the most was how I obtained the information to increase our speeds. Much of the information was obtained from competitors. How could this be? Simple, I make it a priority to call and discuss hosting issues with many of the companies that I compete with. I try and do this once a month. I truly want to help these companies with technical problems and business decisions that they come up against. I help where I can and most of these companies return the favor when I am looking for information as well. Over time we have come to trust and help each other so that we might both have a better hosting service.

Many see this as a strange way to do business. I don’t have to hurt other businesses in order for me to succeed. Quite the opposite actually. When I need help or want to see how our operation compares with another company that is similiar to mine I ask them and normally without hesitation help is given. I try and give help myself even if it is unsoliciated. Often I have called competitors and told them of a problem or security concern that we have seen and to tell them where to look to find the problem and what we did to solve it. I do this because I believe what many say but don’t act on. I treat others as I would like to be treated and guess what? It works – even in the hosting industry.

Bluehost customers are now reaping the rewards of me being a good citizen in the hosting community. Any hosting company that is in need of help can always email or call me with problems and I will do my best to help. In return, I would expect them to do the same and most are eager to do so.

Just about 15 minutes ago I was chatting with the head admin of a different hosting company. We were talking about some firewall issues and what we thought was the best method to do x,y,z. We both came away from the conversation better informed and more ready to solve the problem than if we had not spoken to one another.

Working with competitors is doable in most cases. Hosting is a big enough market that I don’t damage my own business when I help a competitor solve a major problem. Think about that? Are you willing to do the same? If the answer is clearly no, I would encourage to reevaluate and see where there might be benefits. I would be interested in your comments especially if you do it my way and how it worked out good or bad :)

Thanks,
Matt Heaton / President Bluhost.com

5 Responses to “Working with competitors…”

  1. First off, as a customer, thanks for all you are doing to improve the speed of your servers and network!

    However, what you are saying is not unrealistic. As BlueHost is a known entity, having a peer discussion about operations is not unheard of. You could be talking about using SalesForce.com or a particular virus software – your competitive advantage does not lie in that.

    Where competition among competent companies comes is from the service they deliver, marketing, word of mouth, referrals, etc. Because you and your competitors know you use a wrench is not a trade secret, it’s what you do with it that is!

    mp/m

  2. Chris says:

    This doesn’t have much to do with the post, but I thought I might post it anyway. Anyway, I’m a customer who is reaching the end of his account period with Bluehost. Today, I had a couple of queries that I had been wondering. I used the live support, and in a matter of minutes my problems were solved. I got comprehensive, polite, and most importantly, fast answers.

    I will be renewing my subscription :)

    Thanks for not being one of the hosts that I’ve been with previously, who have abused their customers.

    Regards,
    Chris

  3. Bill Tozier says:

    This sort of thing happens all the time among old-school companies. It’s called benchmarking, and there’s a huge Management Science literature about all the boundaries-of-organizations issues, Best Practices, and the “rising tide lifts all boats” kind of language prevails.

  4. Markus says:

    I’m not directly working with any competitors, but I sure would and I often forward customers to a competitor if I think their product suits them better than ours.

    Also, what seems to be quite uncommon, is that I’m treating suppliers like customers (and both like I want to be treated myself). First and foremost it comes natural to me and is more fun doing business this way, but in the end it always pays off in one way or another.

    Kill or get killed works for those who treat others like killers. And help and get helped works for those who treat everyone like peers.

    But Bill Tozier is right … it happens with “old school” companies too. I know a couple of guys with restaurants in the same street, who are practically directly competing with each other but who still help each other out with a couple of eggs or a bottle of wine or whatever may be needed.

    Basically it boils down that you reap what you sow, and doing business the way you describe it is a lot more fun and satisfying and gratifying.

    Markus

  5. […] Mark Heaton, the CEO of BlueHost.com puts forth some interesting remarks on how working with competitors can be a great benefit. More often than not business is perceived as cut-throat. What happens when competitors work together? http://mattheaton.com/?p=69 […]

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