We had such a positive response to last week’s Deeper Thoughts about coopertition that we’re going to do one more. You’ll recall that coopertition is the concept of competitors working together for mutual benefit (e.g. such as sharing costs or resources). It’s also not foreign to the mortgage industry, although it is somewhat rare. It was a great opportunity to discuss this with Josh Pitts on his amazing SHRED podcast recently.
I was asked more than once this past week for “real-life” examples. There are actually several, plus some amazing opportunities for more.
Let’s start with the premise that mortgage lenders sell a fairly commoditized series of products and work with a fairly small universe of service providers and partners. Consider that there are thousands of lenders nationwide as well. So unless the service providers are competing for the same client at a very local level, there are numerous opportunities for coopertition. Unless it involves revealing proprietary data or knowledge, there are any number of ways service providers can help themselves on the margins by helping similar businesses—especially in those cases where the service providers don’t provide the exact same service, but perhaps overlap. For example, two technology providers that offer platforms or solutions that streamline different but adjoining or interconnecting elements of the underwriting or production process.
Consider, also, the ever-changing world of legislative and regulatory change to which we are all subject. Numerous opportunities abound –whether that’s to lobby our government for practical change or share and exchange best practices for staying compliant. As an industry, we all lose when a bad apple or two bring even more heavy-handed restrictions and regulations down upon all of us.
The title industry has actually, in some ways, long been an example of coopertition. A lot of that comes from the hurdles erected by varying state by state and even county by county rules and customs. In other words, a title agent that practices on one side of the state line but isn’t licensed on the other side of that line will not be handling (directly) title insurance in that state. However, that agent most definitely will have an agreement or partnership of some sort with a licensed agent in said state—even though both are, to some degree, competing for orders from many of the same lenders. It may not even involve the same order. Title companies often share title search-related data for the sake of time and cost savings. In fact, they often work on opposite sides of the very same transaction.
Without a doubt, competition makes capitalism go. Healthy competition brings out the best in us and our companies. But competition doesn’t always have to mean total war! In in industry as heavily regulated and scrutinized (and even criticized) as ours, not to mention an industry that absorbs the high costs of that regulation and scrutiny, doesn’t it make sense to use a little coopertition to balance the scales a bit?
Got an idea for Deeper Thoughts or LLL…or even your own example of coopertition? Email me at email@example.com.