Competitive ‘Intelligence:’ When Social Networking Backfires

Today, I would like to take a minute and tell a story.  A story about an actual, real-life situation in which a high-profile player in an extremely competitive industry makes a huge mistake the rest of us can learn from.

At the small company I currently work for, we have a competitor I will call Randy.  Randy is Founder and CEO of the second-most recognized firm in our market space (ours being first) and has spent millions of dollars over the last few years marketing directly against my company; attacking everything from our product quality to our pricing strategy to our CEO directly.  The focus of the industry we are fighting over is a technical manual that spawns hundreds of ancillary products—including software, audio books, college courses, online learning classes, and other related items in dozens of countries and dozens of languages.  Randy and the CEO of my company both publish their own version of this technical manual, and between our two companies we possess well over 95% market share.  At the present time both books are in the process of being completely rewritten, and are scheduled for much-anticipated worldwide releases during the first week of April.

On the advice of a friend, last night I spent some time setting up my first Twitter account.  After choosing a theme for my Twitter landing page and subscribing to a few news feeds, I spent the next few minutes looking for other people I knew—relatives first, then friends, then business contacts.  Although I was disappointed at the number of friends and relatives I was able to find (this is supposed to be a social networking site, after all) none of this mattered when I discovered my arch-nemesis Randy had a Twitter page.  And it was unprotected.

In just a few short minutes, the wealth of competitive information I was able to gather from Randy’s 30 or so ’Tweets’ was nothing short of astounding.  For starters, I know my recent decision to increase the marketing focus in his home city is working, because he used his Twitter account to complain about several lost local customers.  I also know what cities and organizations Randy is visting to promote his book release, and which industry experts helped him write it (I always suspected he wasn’t working alone).  But most importantly of all, I know that although says his new book will be released during the first week of April, Randy will never meet his deadline . . . because as of yesterday, he was still writing it.  Actually, he was technically still ‘editing’ it—which means the best he can hope to achieve on a release date is the week of April 20th.

With this single piece of knowledge, I now have a decision to make.  I can either time the announcement of my company’s book for a couple of days before Randy’s simply to be first to market (which I know would bruise his immense ego), or I can time the release of our book for the day after his, and make sure Randy and his company get less than their day in the sun.  Thank you, Twitter, for giving me choices I can work with.  After being a member of Twitter for less than 30 minutes, I was able to double (if not triple) my knowledge of my closest competitor.  And more importantly, I really didn’t work that hard for it.  Imagine what Randy must be revealing on his Facebook page . . .

With social networking sites, there is an implied barrier of confidentiality that really doesn’t exist.  In about half an hour, I was able to assemble a profile on the CEO of my company’s closest competitor.  And because I’ve been doing small company strategy for more than a decade and a half, I know how to use this information to either make money for my company, or simply push Randy’s buttons when I get bored.  If you are an owner, manager or executive at a small company in a competitive industry, you need to understand something: competitors are always watching what you do. If the social networking bug happens to bite you, be smart about what you post online—stick to the personal stuff, and lock your profile.

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