Orion: Imagine your biggest competitor just launched a new service. Your gut reaction is probably to fight back, to build a 'better' version, to start a feature war. But what if the smartest move wasn't to fight them at all? What if it was to them, to cooperate in a way that makes the entire market bigger, and then use that new landscape to your advantage? It sounds counterintuitive, but it's the core of a powerful strategy called 'Co-opetition.'

honglei ios online: It definitely goes against every instinct, especially in a competitive field like technology. The default is to see everything as a zero-sum game.

Orion: Exactly. And that's why we're diving into the book 'Co-opetition' by Adam Brandenburger and Barry Nalebuff. It gives us a new lens to see business not as war or peace, but both. With me is Honglei, a product manager in the health tech space, where the stakes are incredibly high and the players are numerous. Honglei, thanks for joining.

honglei ios online: Happy to be here, Orion. This is a topic I think about a lot.

Orion: I can imagine. Today, we're going to learn how to become a master strategist. We'll tackle this from two angles. First, we'll explore how to deconstruct any business situation to find your true source of power. Then, we'll discuss how you can become a true 'game-changer' by strategically rewriting the rules of competition itself.

Orion: So, Honglei, to start thinking like a game-changer, we first need to understand the game itself. The book gives us a fantastic framework called PARTS. It's an acronym for the five levers you can pull to change any business situation: Players, Added Values, Rules, Tactics, and Scope.

honglei ios online: I like that. As an analyst and a PM, having a structured framework is immediately useful. It gives you a checklist, a way to make sure you're not missing anything.

Orion: Precisely. And the most critical one to grasp first is 'Added Value.' This isn't just about what you offer; it's the real source of your power in any negotiation or competitive landscape. The book has this brilliant, simple story to explain it. Can I tell you about the card game?

honglei ios online: Please do.

Orion: Okay, picture this. A professor at Harvard, let's call him Adam, is in a room with 26 MBA students. He has 26 black playing cards. Each student has one red playing card. The deal is simple: the dean has put up a prize pool. For every matched pair of a red and a black card, the dean will pay out $100. The students have to negotiate individually with Adam to sell him their red card. What do you think is a fair price?

honglei ios online: Hmm. Well, there are 26 red cards and 26 black cards. Each pair creates $100 of value. Neither can create the value without the other. So, a 50/50 split seems logical. Adam gets $50, the student gets $50.

Orion: That's exactly what happens. The power is symmetrical. Now, here's the twist. The next day, a different professor, Barry, plays the same game. But this time, he tells the 26 students that he's unfortunately missing three cards. He only has 23 black cards. He still offers to buy their red cards. What happens to the price now?

honglei ios online: Oh, that changes everything. Now there's a surplus of red cards. Three students are going to be left with nothing. The fear of being one of those three is immense.

Orion: Immense. The students' collective power evaporates. If a student holds out for $50, Barry can just say, "No thanks, I'll go to the next person. I only need 23 of you." The book says the students end up taking as little as $10 or $20. Why? Because three of them have an 'Added Value' of zero. The total pie with them in the game is the same as the total pie without them. And when your added value is zero, you have no power.

honglei ios online: That's a powerful and slightly terrifying illustration. It's so easy to think power is about who you are or how good your product is, but this shows it's about the structure of the game. In health tech, it makes me think... our 'Added Value' isn't just our cool feature set. It's how indispensable we are to the other players—the hospital, the insurer, or the patient.

Orion: Unpack that a bit. Who are the players in your game?

honglei ios online: Well, you have the obvious ones: us, our direct competitors, and our users—the patients. But the real game includes the hospitals and clinics who recommend our app, the insurance companies who might reimburse for it, and the big Electronic Health Record systems, the EHRs, that we need to integrate with. We're one of many 'red cards' for them.

Orion: So you're one of 26 students competing for 23 black cards. How do you use this framework to increase your power?

honglei ios online: You have to find a way to not be a commodity. If another patient monitoring app can be swapped in for ours easily, our 'Added Value' is low, and we're stuck begging for that $20 deal. But... what if we integrate so deeply with a specific hospital's EHR system that ripping us out becomes incredibly painful and costly?

Orion: I see. You're changing the game.

honglei ios online: Exactly. We're making ourselves a unique 'red card' that only one 'black card'—that specific hospital system—can easily pair with. Suddenly, we're back in that first scenario. We're in a 50/50 negotiation because they need us as much as we need them to create that value. Our added value is no longer zero; it's a significant part of that $100 pie.

Orion: And that idea of making yourself indispensable leads perfectly to our second topic: actively changing the game. Because if you don't like the power dynamic, you don't have to accept it. You can change the 'Rules.' This actually reminds me of your interest in Ruth Bader Ginsburg. She was a master at not just playing within the existing legal system, but strategically picking cases that would change the underlying rules—the precedents—for everyone.

honglei ios online: That's a great connection. She saw the system and knew which lever to pull to create the biggest change. It wasn't about winning one case; it was about changing the rule for all future cases.

Orion: Exactly! And in business, we often think of competition as a simple price war. Who can offer the lowest price? But 'Co-opetition' shows a more elegant way. Let's look at the auto industry in the early 1990s. GM was in a brutal fight with Ford and others. Every year-end, they'd have to offer massive rebates to clear out inventory. It was a race to the bottom.

honglei ios online: A classic price war. Bad for profits.

Orion: Terrible for profits. So, in 1992, GM did something brilliant. They launched the GM Card. It was a MasterCard, and the rule was simple: for every dollar you spend anywhere, you get a 5% rebate. But—and this is the key—that rebate could be used toward the purchase of a new GM car or truck, up to a certain limit. Why was this so genius?

honglei ios online: Well, it builds loyalty, obviously. You're incentivizing people to stick with GM for their next purchase.

Orion: It does, but there's a deeper, more strategic reason. It changed the rules of the pricing game. First, it was a discount. GM wasn't lowering prices for everyone in the market; they were only rewarding their future, loyal customers. Ford couldn't easily copy it without helping GM sell more cars through the MasterCard network.

honglei ios online: Okay, that's clever. But what's the second part?

Orion: The second part is that it made GM a tougher, more credible negotiator. Think about it. If GM were tempted to launch a big public rebate program later in the year, it would now be astronomically expensive. They'd have to give that discount honor all the rebates their millions of cardholders had accumulated. By creating this rule, they essentially tied their own hands, signaling to Ford and everyone else, "We are not going to start a price war, because it would be too painful for us."

honglei ios online: That's fascinating. They created a 'rule' that made it painful for to be irrational. It's a form of strategic inflexibility. In healthcare, we're bound by so many external rules—HIPAA, FDA regulations, insurance policies. We often see them only as constraints. But this suggests we could create our rules within that system.

Orion: Precisely. How could you apply this 'GM Card' logic to a health tech product?

honglei ios online: Well, think about patient engagement or chronic disease management apps. The market is getting crowded. Instead of just giving out digital badges or points, what if you created a system where consistent, verified use of your app—say, tracking blood sugar daily for a month—unlocks tangible benefits with a partner? Maybe a discount at a specific pharmacy chain, or even a small reduction in the next year's insurance premium with a partner insurer.

Orion: I love that. So it's not just a gamified reward; it's a real-world value proposition.

honglei ios online: Right. And it does what the GM card did. It's a targeted reward for loyalty. It makes a competitor's simple offer of '10% off for new users' less attractive, because your loyal users have this compounding benefit they don't want to lose. You're not fighting a feature or price war; you're changing the definition of long-term value. And you're creating a win-win.

Orion: A perfect example of co-opetition. The insurer wins by getting more engaged, healthier patients. The patient wins by getting real rewards. And you win by locking in a customer and increasing your 'Added Value.' It's not about beating the insurer; it's about cooperating with them to create a bigger pie for everyone.

Orion: So, let's bring this all together. We've seen two incredibly powerful ideas from 'Co-opetition' today. First, you have to systematically analyze the game to understand your true added value—are you one of 26 commodity red cards, or are you a unique, indispensable one?

honglei ios online: And that analysis gives you the clarity to act. It tells you where you're weak and where you need to innovate to survive.

Orion: Then, the second big idea: don't just play the game you're given, actively change it. You can become a game designer by rewriting the rules, just like GM did with its credit card to escape a destructive price war.

honglei ios online: It really shifts the entire mindset. As a product manager, my focus is so often on the user and the features. This framework forces me to zoom out and think about the entire system—the business model, the partnerships, the competitive dynamics. The key takeaway for me is to constantly ask: What's a rule in my industry that everyone just accepts as 'the way it is'?

Orion: A perfect question to end on. What's that one sacred cow, that one unquestioned assumption you could challenge? Answering that might just be your next big breakthrough. Honglei, thank you for these incredible, practical insights.

honglei ios online: This was great, Orion. It’s given me a lot to think about. Thank you.