Competitive Tactics — Positive & Negative
Dan Primack’s column from Monday October 29th about the impending IPO of Twist Bioscience discusses the lawsuits waged by large biotech company Agilent accusing Twist’s co-founder, who used to work at Agilent, of stealing trade secrets and poaching employees. Twist says that its technology uses silicone and thus is different, and says Agilent’s lawsuit is working to “stifle innovation and competition”. Agilent sent a letter to the SEC asking Twist to amend their IPO filing documents days before the IPO. This is a very unsubtle act of sabotage against their IPO.
Agilent’s grounds for filing these lawsuits and attempting to disrupt Twist’s IPO is a result of the incentives inherent in a monopoly-focused culture. Agilent is aiming to protect its market share and fend off direct competitor Twist, and because Twist’s co-founder worked at Agilent, they have a seemingly solid footing to do this. Even if it just disrupts the IPO or adds to Twist’s legal bills, Agilent will come out on top.
It’s actually not a question to me of who is right in this matter. The frustrating part is the fact that the we the people, the consumers, the beneficiaries of the social good that both of these companies can bring to the world, are the victims in this quest to maximize profits, protect intellectual property, and blow competitors out of the water.
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It seems to me there are two types of competition — negative and positive competition. It’s the latter that gets us the best products and medicines that technology can develop. It’s the former that causes prices to surge and new and better medicines to get ‘killed’ before they’re given a chance to hit the market. It’s the latter that fosters a culture of prioritizing profits over the benefit of the social good.
The positive competition in the case of Agilent and Twist is the fact that Twist’s co-founder broke off and built her own startup with what she felt was a better technological approach than the one used at Agilent. I’ve seen many companies created that way, including a wastewater treatment startup bred out of another wastewater treatment startup due to the introduction of algae for oxygen-creation in the process. This happens all the time and is a symptom of healthy, positive, competition driving our society forward to the best solutions to hard problems.
And then there’s negative competition, with Agilent engaging in petty tactics to hobble their new competitor Twist in whatever way they can, as opposed to say investing in them, partnering, acquiring, or god forbid working to invent an even better solution to the shared problem.
The source of these hostile monopolistic tactics and the reason some feel they’re necessary is the subject of another post. However part of it is the culture around intellectual property engendering a protectionist approach as opposed to a shared approach to achieving common goals with a given piece of technology.
It is my intention to write more on this subject as I dive deeper into it, but in the meantime I encourage us to be mindful of these positive and negative competitive tactics and to work to espouse the positive ones in our business dealings going forward.
