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Life Design

How to use game theory in shaping your perception on life

I’m the last person to proclaim they know anything about game theory, but wrapping my head around the difference between finite games and infinite games has changed my life for the better. And I think if you’ve never heard of anything about the two terms then it’ll definitely change yours for the better as well.

It all started with the book “Finite and Infinite Games” by James P. Carse. A book I honestly never took any notice of as it sat on the bookshelf collecting dust. I randomly picked it up one night during my many restless moments and began reading. It’s not a light hearted afternoon read and it took some re-reading to understand what was being written on some pages, but the liberating feeling of having someone put down in words what you subconsciously always knew was addictive.

“There are at least two kinds of games. One could be called finite, the other infinite. A finite game is played for the purpose of winning, an infinite game for the purpose of continuing the play.”   – James P. Carse

The entire book is based on these two types of games. Finite games an infinite games, the book goes on to explain the boundaries, differences in both and how simply changing the mental attitude of which type of game you’re playing can shift your entire perception on life. But I’ll save you from a book review since that’s not why I’m writing. (I’ll put a link at the end if you want to read the book) I’m writing to tell you how I’ve manage to apply these concepts in helping myself get through the ups and downs of entrepreneurship.

Finite games are games that have a clear set of rules that determine who the winner is and who is or are the losers. That’s to say it’s a defined competition where there’s a clear goal in mind. A very easy way to determine a finite game you are actively playing in is if you’ve set yourself a SMART goal.

SMART is a goal setting framework that’s widely used by many self-help enthusiasts. A SMART goal has all the elements of a finite game in the way it clearly sets the boundaries of the game. Winning is made very clear. And there’s the element of time used when setting the goal. For example: I will learn how to drive a manual car by the end of this year. The definition of winning is to know how to drive a manual and the time frame is until the end of the year. Just by simply reading the goal already puts you in a finite mindset. You have limited yourself to learning how to drive within a set period of time and what to drive, and if you don’t achieve it then it’s defined as losing.

This can be a massive blow to your self-esteem and confidence when it comes to life, but especially when it comes to entrepreneurship. The number of times I have failed to reach personally set goals is enough to make anyone wonder why I keep going and that’s because everyone seems to see entrepreneurship as a finite game. A game where time plays a big part in defining whether you are winning or losing. A game where there’s also an end.

For a finite entrepreneur game, the end would probably be when you cash out and sell your business or reach a level of wealth you’d never be able to spend all of it in a reasonable manner. Or any other monetary milestone to reach within a certain timeframe. That’s the game most people are playing when they start their businesses. It was the game I played until I read the book. And it’s the same game that sees about 50% of all businesses no longer in existence after 5 years.

That’s a sad statistic, but it’s also a scary truth. A finite entrepreneurship game will have many more losers than winners as with any finite game that exists. But what if I told you I can change that by simply shifting my entrepreneurial journey into a infinite game.

Credit: www.ritholz.com

An infinite game is starkly different from a finite game. There are no fixed elements in this game, with everything being ever-changing. The definition of winning and losing, the players involved, the boundaries and rules etc. Nothing is fixed. The timeline we play an infinite game is also starkly different. There is no timeframe for the game to be set in, because the ultimate objective of an infinite game is to play it. That’s to say the game never ends and therefore there are no winners or losers, for indefinitely.

To use an infinite game mindset towards entrepreneurship would seem like an oxymoron in itself. Why would you not want a clear definition of success? Isn’t the whole point of doing business is to make money? True, and yes. But in an infinite game there are also many smaller finite games within it and this is where the magic happens in your perception. With every win or lose from a smaller finite game my main motive is to continue the infinite game and not to win or lose in itself.

To put this into an example would be my Etsy business experience. I had a multitude of finite games along the journey and the game ultimately ended when Etsy suspended my shop. That was a finite game. I had lost the game and joined the statistic of not passing the first 5 years in business, but I didn’t end my infinite game of entrepreneurship. By that point my publishing business was already up and running making me money. I managed to use some of the profits from the Etsy business to start my publishing business and to me that’s not a lost anymore but a way to continue my journey.

december 2016 createspace royalties

You can see that the boundaries shifted dramatically, the business model changed, the players changed, the rules and systems all changed. The only thing that stayed constant was that I’m still playing. And that’s the difference between the game I’m playing compared to many other entrepreneurs in the world. I start and run my businesses for the process of starting and running a business and not the product, service or business model in question. I’m not attached to any set of rules or limited to a market or industry. I’m not packing up my things and applying for a “real job” once I failed in one finite game, because my objective is to continue playing.

Many start their businesses from a strong heated passion of theirs and they attached themselves within the fixed boundaries of that one business idea or entrepreneurial vision. They are ultimately limiting their entrepreneurial game to just that one finite game. When I put it in such plain language you can see how hard the path of entrepreneurship is and how massively bad the odds are for a person thinking about starting a business. It starts to make sense why so many dream and talk about it but never get around doing it. It starts to make sense why many give up halfway and leave the game called entrepreneurship. But it also starts to make sense why I and like a few others still remain when we play an infinite game instead.

We are the rare unicorns that fail more times than we succeed to only have the rest of humanity look at our few good successes in amazement and admire our “resilience” towards failure. The truth is, it’s not resilience that keeps us playing, it’s just the fact that I can’t ever see myself being anything but an entrepreneur. Every failure I experience isn’t an end state that determines who I am in business, but just another chapter in the game that never ends.

Yes, that’s right. I’m comparing entrepreneurs to this sparkly unicorn figurine

Once you see your life as an infinite entrepreneurial game, you never look at successes and failures in the same definitive way, because you know that they’re simply small finite games within the larger infinite game.

 

“It is impossible to live without failing at something, unless you live so cautiously that you might as well not have lived at all – in which case, you fail by default.” — J.K. Rowling

 

The infamous J.K Rowling got her initial Harry Potter manuscript rejected so many times by various publishers that she humorously tells people she had lost count. But she’s a successful writer in many people’s eyes no matter how many times her manuscript had gotten rejected. Or is she? Not many people know J.K Rowling had multiple failed novels after her Harry Potter series. She had published them under a pen name and found little success until her identify was revealed. She still continues to write within that series (Robert Galbraith)

You might be wondering, why would someone who made millions carry on writing books that don’t sell nearly as well. Isn’t the game over? Or, why would she write more than one book in the series if it didn’t do well? The answer I’m assuming is, J.K Rowling is playing an infinite writer’s game. She cannot possibly see herself doing anything but be a writer just as I can’t possible see myself doing anything but create businesses.

Credit: wiki commons

Now it’s your turn. What finite game are you currently playing that is creating a limited perception towards life? What would happen if you take a infinite game approach?

Link to the book

Other resources you might want to check out:

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