We often get asked this by founders considering their M&A options.
Here’s a low-risk approach to start:
1. Initiate the Dialogue
Frame the conversation as an informal networking opportunity. Suggest a meeting, like, “I realize we operate in the same space and thought it might be beneficial for us both to connect.” Industry events can be a low-key setting to begin the dialogue without the formality of scheduling a meeting.
2. Focus on Shared Interests
Concentrate on potential areas of collaboration, such as customer referrals for different market segments, working to help set industry standards, or aligning around common industry-wide pain points. Remember, these conversations are often just that – conversations. They may not lead to immediate collaborations but could pave the way for deeper discussions later.
3. Know Your Boundaries
Decide in advance what information you are comfortable sharing. General industry insights? Absolutely. Financial information? Definitely not. Never share any data that could be used against you in a sales situation.
4. Practice and Refine
Start with smaller competitors to get early practice. Refine your approach based on these experiences.
5. Keep the Dialogue Going
If conversations are helpful, propose periodic, informal check-ins. This builds the relationship without the pressure of an immediate collaboration.
What’s been your experience in engaging with a competitor? How did you initiate the conversation?