The nature of business

We have a surprise for you:

The best way to beat the competition is ... not to fight it!

Why not?

Because most companies mistakenly believe that the game of business is a zero-sum game.

Zero-sum game definition:

A game in which the sum of all players’ wins and losses is 0.

In other words, a win for one player is necessarily a loss for another.

Sad news for them: they’re thinking wrong and are mistaken.

To understand why they're wrong, we need to understand the very nature of business.

Business is a game, and all games fall into two different categories:

• Finite games
• Infinite games

Finite games.

Common characteristics of finite games:

• Each player is known to the others.
• The rules are clear and agreed upon.
• A common goal is set by all players.
• The game's purpose is to win.
• What you need to succeed is power.

Example: Football, Volleyball, Baseball, Basketball …

Infinite games.

Common characteristics of infinite games:

• Known and unknown players.
• The rules are always changing and evolving.
• No common goals are set by the players.
• The aim of the game is to stay in the game as long as you can.
• What you need to succeed is stamina.

Example: The cold war, life, business, marriage …

The business game.

By definition, the game of business is an infinite one:

• The winner is not the one who crushes the other. The winner is the one who stays in the game the longest.
• The rules are neither fixed, common, fair, or equitable to all players and are subject to change. It’s best to play with them while they exist, to stay in the game longer.
• The quest for power is pointless since we don’t win by crushing others. Self-sufficiency wins the day in the long run, allowing us to play forever.

The proof lies in the fact that the companies that have been “winning” the business game so far are the ones that have been surviving and growing for hundreds of years:

• Beretta - 1526
• IBM - 1911
• Hermès - 1837
• Ferrari - 1947
• …

Curiously, the longer these companies are in business, the easier it is for us to qualify and identify them as brands.

The truth about competition.

Winners focus on winning. Losers focus on winners.

90% of your competitors mistakenly think they’re fighting against you when they’re fighting against themselves to stay in the game the longest.

Understanding this concept is your most significant competitive advantage, as it frees you from the pressure of competition. By understanding the rules of the game, we now know that:

1. Competition doesn’t matter. There’s room for everyone.
2. Our only competition is ourselves since we’re our only valid frame of reference in this game.
3. The best way to win is to be 1% better than yesterday, every day. This leads to exponential progress over the long run (see Law of Accelerating Returns + Marginal gains).

Still not convinced?

Here’s the other side of the same coin.

The reality is that:

• most companies don’t make money.
• most companies don’t bring value to their markets.
• most companies spend all their time copying their competitors, who also fail to keep their heads above water.

Why would you copy them or even try to beat them?

Your competitors are playing with their poop. They’re already making a mess of it.

They don’t need you to help them dig their own graves.

Let them shoot themselves in the foot on their own.

Since they’re all doing it the same way and none of them profit that way, we will try something else.

Don't fight nature.

Today, you can start playing the infinite game of business the other way.

In other words, you can start building a company that tries to be 1% better than yesterday every day.

The following pages will walk you through doing it pragmatically.