Before I started a business I assumed that you should hate and distrust your competitors, maybe even talk bad about them and make their lives difficult. I’ve met many people who have that impression of the business world.
One approach to motivating your team is to rally against an evil competitor, especially a larger one. Guy Kawasaki advocates that in “How to Drive Your Competition Crazy”. I guess that if you are up against Microsoft then that is useful, but most businesses are up against similar size companies. It is hard to demonize another small company.
In our early years we tried hating our competitors, but eventually it just didn’t feel fun and it certainly didn’t help us get more work done or sell more software. These days we maintain friendly ties with the other plug-in companies. Occasionally we get in touch to exchange technical or business advice. I’m not going to give them our financial reports or source code, but there is no harm in high level advice.
The idea that you should hate your competitors comes from the false notion that there is a fixed number of dollars out there. Wrong! If we all make super awesome tools then Photoshop customers are going to buy more tools, especially if our products don’t overlap too much.
The truth is that the quality of your products and service are what dictate your success, not the actions of your competitors. You should know what your competitors are doing and occasionally learn from their successes and failures, but for the most part you should just ignore the competition. You have work to do. Stop looking at your neighbor’s paper!