How do you gracefully compete in business with a friend?
December 17, 2011 10:19 AM   Subscribe

We’ve been asked to work on a project. I have a friend who seemed to have their heart set on this same thing. We’re the older, more established company. They’re the younger company but the project is more obviously in their area of interest. They already know they won’t be doing it, but they don’t yet know that we might. What’s the graceful way to handle this situation without incurring unnecessary resentment?

I have a client-services firm. We were recently contacted about an interesting project that seems fun, well-paid, and right up our alley. However, I remember this same potential project from a some time ago when a close friend who runs their own company described it to me as their dream gig for the year—they’d been contacted about the same thing. I did not know until now that they got partway through the business development process, the client decided it wasn’t a good fit, and looked for someone else. The project is even more up their alley than ours, and because their business is younger it’s probably more meaningful to their publicity and bottom-line as well.

We don’t normally compete with this friend, and I know they’ll find out through the grapevine one way or another that something they lost floated downstream and came to us. I see no reason not to take it, though when I heard about it my initial thought was “oh, we should totally partner with friend’s company, they’ll love this!”.

Putting yourself in friend’s shoes, how would you want an older, more established company run by people you know and like to handle a first instance of direct competition? Reference your ideas in the field? Contact you early to let you know what’s happening? Ask you for input? Just do a generally good job so you don’t feel like the project was a wasted opportunity?
posted by anonymous to Work & Money (6 answers total)
IMHO, this is just one of the risks of having friends in a related field.

But in terms of talking to her about it, just play it like 'Big client picked us because it was a competitive bid and we have some expertise on a particular sub-dimension of it.'

I don't know your friend, but I would probably say to her "Hey, I wanted to tell you myself before you heard it through the grapevine - MyCompany got BigClient's big for CoolProject. I know that YourCompany was bidding on it too, so I wanted to clear the air."
posted by k8t at 10:29 AM on December 17, 2011 [1 favorite]

There will undoubtedly be some hurt feelings, there. It's unavoidable. But my first thought was the one you articulated: see if you can partner with your friend's company on the project, for obvious reasons. If you can bring your friend's company in on this, it will go a long way, I suspect, to smooth any ruffled feathers.

Other considerations:

1. It would be good if, when you discuss this with your friend, there were some face-saving way to explain why the other company went with you and not your friend. If your friend can accept that it was, for example, simply because yours is the larger, more established company and the folks with the project thought that was their deciding factor, well, there's nothing personal about that and it can't be helped.

2. As for communicating with your friend about what's going on, you have a business ethical responsibility to preserve whatever confidentiality the project sponsors have entrusted to you. To the degree that their not communicating their decision to leave your friend's company was intentional, that should be respected -- after all, they're your client now and you owe them that professional courtesy and it takes priority over the professional courtesy of informing a competitor or a personal friend.

3. That said, you will have to decide, at whatever point seems reasonable, when you can inform your friend, though. At some point, it will become common knowledge in your industry and you don't want your friend to find out through the grapevine. Consider, then, taking the proactive step of asking your new clients whether your project is confidential, etc. If they say it's not, then that allows you to take the step of informing your friend. I'd do that, as a professional courtesy (as well as just being a good friend). My own sense would be that you should do this immediately, if possible. I.e., give clients a call, let them know that you are interested in possibly partnering with or discreetly seeking input from other industry professionals, etc., and see whether client has a problem with that. If they don't, then have lunch with your frined and break the news, in the context of exploring a possible partnership.

Good luck!
posted by darkstar at 10:33 AM on December 17, 2011

A real friend would tell them right away, and understand that business is business. I'm sure if you told them the exact thing you said here, they would understand. Also, if you end up getting too much work, you could always pay their company to do some of the work for you as a subcontractor.
posted by markblasco at 11:06 AM on December 17, 2011 [1 favorite]

It sounds like they lost the project before you got the call to bid on it. If that's the case, no big deal. They might be jealous, but they can't blame you. If there was some crossover, then you might have to do a little more diplomacy, but still, it sounds like they lost their dream project on their own. And not because you "came in and stole it from them".
posted by gjc at 12:12 PM on December 17, 2011

1. Call your friend and tell him asap. If you're concerned with his feelings, he should not hear it through the grapevine.

2. If you're just finding out now, it's not like you're *directly* competing with them. Life happens. You make up for it by sending them referrals for potential clients when you're too busy to take up new work.

Nothing generates good will like good referrals.

I did not know until now that they got partway through the business development process, the client decided it wasn’t a good fit, and looked for someone else.
They probably have opinions about the client that you might be interesting in hearing about. I don't know about your industry, but in mine a "not being a good fit" usually involves some drama.
posted by pmv at 2:45 PM on December 17, 2011

If I would do the work better, and it would be more up my alley, I'd want to be your prime subcontractor.
posted by jannw at 2:13 AM on December 18, 2011

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