In discussions with founders and investors, as well as interviews, I describe the role that games have played in my career. It’s become a somewhat quirky facet of my public persona: Reid Hoffman, game geek. I love games, and I love talking about them. But none of these profiles has ever focused on the games themselves. They might (at best) mention one or two games and muse.
So, for the latest episode of Greymatter, I sat down with my friend, Blitzscaling co-author, and fellow game geek Chris Yeh to take a deep dive into the details of how games have shaped my personality and career. Not only do we discuss why I think games are so valuable for entrepreneurs, we take an in-depth, geeky look at the specific games that impacted my life.
You can listen to our discussion on the Greymatter podcast here.
Why Games Are Serious Strategy
In my experience, games are one of the best ways to understand the important field of strategy. Strategy arose from the life-and-death stakes of warfare. Choose a good strategy, and your tribe or nation would win the battle or the war. Choose poorly, and you might be driven out of existence. To help develop winning strategies, militaries developed wargames as a way to explore various strategies and analyze specific scenarios. And while most of the important games in my life are not wargames, they share with wargames the ability to ask and answer key questions:
- How do you coherently express a strategy?
- What is the relationship between a strategy and goals?
- What is the difference between a strategy and a tactic, and how do they fit together?
- What are things that you can do to set the field to make a strategy more effective?
- Which strategies work best against which kinds of opponents?
Games allow players to develop what the Germans call “fingerspitzengefühl” or “finger tips feeling” for these key questions in an uncertain and fast-changing world.
When people ask me in a business context, “How did you learn strategy?” My answer is not that I studied in business school and earned an MBA, or that I read and re-read Machiavelli and Sun Tzu. Rather, I tell them, “I played a lot of games.”
What Kinds of Games Teach Strategy
When people hear that I play games, they often think I mean chess or Go. I think that they’ve seen too many movies where the evil genius and dashing hero play a cordial chess game in a volcano lair. Chess and Go are wonderful games that are effective ways to tune the mind. They require dedication, mental focus, and reflection. But they don’t teach you to be strategic in ways that match the way the world works.
The problem is that chess and Go do not have any outside variables. There’s no luck, no changing weather, no external market forces. The games are totally transparent. You see everything that’s on the board. While this makes them a fair and elegant sport, it makes them a poor analog for the real world.
You can find a Chess book that lists a thousand famous maneuvers, each named after a past grandmaster. For example, the Sicilian Defense is a very popular and effective chess strategy. It was also created in 1594. Learning historical strategies doesn’t prepare you for the real world where you cannot just simply say, “This is exactly like what happened 400 years ago when Giulio Cesare Polerio played Geronimo Cascio.”
The games I gravitate towards require skill, reward those who learn the rules, and often have a corpus of general strategies and tactics. But they also incorporate uncertainty and randomness, whether in the form of rolling dice, competitive subterfuge, or incomplete information. This makes them much more true to the real world, including the world of business. That’s why games have been so integral to my development as a business strategist and to the theories I’ve developed and deployed.
Even a game as simple as Texas Hold’em poker helps refine strategic instincts. As face-down cards are turned over and played (“the flop,” “the turn,” and “the river”) the randomness they inject into the hand requires you to adjust your strategy in a probabilistic, not deterministic manner. A good poker player is constantly practicing epistemology and discovery learning, which are key to being a successful strategist.
You’re not just handed a situation with a clear set of choices, like a Harvard Business School case study. You have to work through the epistemology yourself, which is, what do I believe? What do I not believe? How do I learn? How do I know any of this?
The other key factor is that games have the ability to give you immediate feedback. Unlike the real world where it may take weeks, months, even years for things to play out, a game allows you to try things out and iterate in a very short period of time, perhaps just a few hours.
The final common characteristic of the games I play is that they are multilateral. The most interesting games are not simple one on one arm wrestling contests. They feature a complex mix of competition, collaboration, and structured maneuvers. Gaming provides a safe and fast-paced place where people can learn how to navigate the entire continuum from direct conflict to coalition-building and everything in between.
Of course, not every game teaches useful interpersonal skills. Consider the game Diplomacy, which I think I’ve only ever played twice. I quickly decided that it was not the kind of game I wanted to play with my friends. I remember a four-part cartoon about the game. In the first panel, a person asks three players who are sitting in a row at the table, “Will the real Diplomacy player please stand up?” In the middle two panels, the two people on the outside of the row stand up and their smiles turn to shocked expressions. And in the final panel, those two players have fallen over dead, with daggers in their back, while the middle figure stands, the apparent “winner.”
The problem with Diplomacy is that the only way to win is to lie to and betray your friends. The very first game of Diplomacy I played as a kid, I think the people I played with wouldn’t talk with each other for a week afterwards. The result: I told my friends, “We’re not playing this game anymore.”
Game #1: Tactics II
I discovered Tactics II by going down to the game store and asking for an entry-level board game. It’s a wargame with a basic map and a set of counters for different military units like infantry and tanks, with different attributes. You would survey the battlefield, deploy your units, and the conflicts would be resolved by rolling dice. The combat was probabilistic; it wasn’t that your tank would also beat the infantry or vice versa, so you had to factor uncertainty into your plans, and adapt to changing circumstances with a Plan (or Plans) B.
While the game was simple, it started me asking thoughtful questions:
- What’s your goal?
- What’s your strategy?
- Who are your opponents?
- What’s their strategy?
- What does the battlefield look like?
- What are the things that may affect the battle?
- What’s your strategy for defeating your opponent’s strategy?
- And why will your strategy prevail?
Tactics combine to form strategy, but tactics can also drive strategy. For example, if you understand something about how tank tactics work that your opponents do not, you might be able to break through their ranks, which then becomes part of your strategy. But you still need clever tactics to carry out that strategy–you might want to line up your tanks in a way that conceals your intent, so that an intelligent opponent can still be surprised by the nature of your attack.
But even if you have a better strategy than your opponent or opponents, you still need to be ready to adapt, because luck can derail the cleverest of plans.
This point comes up often in the startup world. You should not judge things purely based on outcomes. You can create the right strategy and choose the right tactics but still fail because the “dice rolls” go against you. You have to have the rigor and intellectual honesty to accurately decide whether you were unlucky or wrong.
This is one of the principles that Annie Duke describes very well in Thinking in Bets, her book on poker and decision-makings. Duke advises against “resulting,” and instead instructs one to be decisioning and processing and evaluating. So the postmortem isn’t, “Did I win or lose?” But rather, “Did I play a good strategy? Or was I just lucky?” Because sometimes, by the way, you’re just lucky.
Part of life and business strategy is to play in a way that luck favors you more often. You can’t make your own luck; that would be determinism. But you can follow a strategy that makes you more likely to be lucky.
For example, building a broad network of allies gives you more options and more opportunities to be lucky.
There’s a game mechanic from the game Dungeons and Dragons, which is the mechanic of advantage. You might gain advantage with the help of an ally, or by using magic. And having advantage means instead of rolling the dice one time and then seeing what happens, you get to roll twice and pick the better result. That’s what strategy is about: giving yourself the chance to roll as many dice as possible, so that you have the greatest chance of winning.
Game #2: RuneQuest
I was first introduced to Dungeons and Dragons (D&D) when I was nine years old. The babysitter my father hired had a highly effective technique for placating young boys, which was to let them slay monsters and win treasure in a fantasy world. The technique worked so well that I would ask my dad, “Don’t you have any dates you need to go on? I need some babysitting.”
But while D&D was my first introduction to tabletop role-playing games (RPGs), my chosen RPG was RuneQuest. What I found is that the kids at my school who played D&D were into what is called “powergaming”. This was a relentless focus on making your character (your in-game avatar) as godlike and powerful as possible. A powergamer would proudly say, “I’m a 20th level Paladin with a +5 sword.” Many enjoy this style, but I don’t. I wanted a combination of narrative as well as wargaming. I wanted to weave a story and solve puzzles and problems, not just slay dragons (unless slaying a dragon was the key to saving my clan’s home town).
One of the ways RuneQuest was different than D&D was its emphasis on skills, as well as combat. RuneQuest characters might be actors or trackers, not just warriors. (Incidentally, D&D’s later editions later incorporated this skills-based roleplaying.)
It also helped that I discovered that headquarters of the company (Chaosium) that published RuneQuest was walking distance from my house!
One of my friends lived on the same block as the company, and since they probably weren’t supposed to be running a gaming company out of a private house, the RuneQuest team were very nice to their neighbors, including the neighborhood kids. I started showing up and hanging out with my friend and got to know the team. When they published a scenario pack with the next edition of RuneQuest, I thought they did a sloppy job. So I went through it with a red pen and brought my feedback to Steve Perrin, the co-creator of RuneQuest.
I could see the look on Steve’s face, which said, “Oh, God, I can’t believe this kid is presuming to tell me my business.” But to his lasting credit and my gratitude, Steve was curious and intellectual, so he read through my commentary, asking questions like “Why did you think this? Why do you think that?” I gave my reasoning, and at the end of the meeting, he asked me, “You want a job?”
“What do you mean?” I asked.
“I’ve got another thing I’m working on,” Steve said. “Take a look at it and tell me what you think. If you come back with something useful, I’ll pay you for it.” I didn’t even bother asking how much before I readily agreed.
My meeting with Steve took place on Thursday afternoon. After school on Friday, I worked on the project with the kind of intensity that only an obsessive kid – or an entrepreneur – is capable of. I think I slept about three hours a night between Friday and Monday; the rest of the time I worked. And then after school on Monday, I walked over and handed in my work.
Over the weekend, I had done everything from tightening up plot lines to adding and deleting characters. I also reworked the math on the difficulty of the encounters. I had been a game master (GM) for a number of years at that point, so I had a lot of practical experience to draw on. Steve read my work and told me, “Great work. We’ll give you a co-editor credit because you helped improve the product.” When they published Borderlands, I received a check and credit for my work, which I proudly brought to my dad.
“Where did you get this check,” my dad asked, looking at me suspiciously.
“I did some work on RuneQuest,” I said.
My dad pondered for a second and said, “Good. But you’re depositing this check. You’re not allowed to spend it.”
I think he was mostly relieved that his RPG-obsessed kid seemed like he had some hope of getting a job someday.
I learned a lot of useful lessons from playing RuneQuest that I later applied to entrepreneurship. Whether you’re a member of a group of adventurers, or a part of a startup team, the narrative is part of what pulls the team together. What is our mission? How do each of our identities connect together, and with that mission? How can I, as a leader, connect to this narrative? How do we form a group narrative and share it?
RPGs also reveal that there is more to playing the game than just “winning”. In a wargame like Tactics II, you either win or lose. Similarly, in RuneQuest or in real life, you might succeed or fail on your quest or your product launch. But you don’t say, “I won!” because you found more gold, or reached a revenue target. It also matters who you are as people, and the impact you’ve had on the broader society.
One of the interesting things about RPGs in particular is the fact that we now have a greater understanding that role playing games are not just games. They’re also improvisational and collaborative storytelling. It’s not like there is somebody who is in charge and telling everyone what to do. Instead, you’re feeling your way through and you’re learning to exert leadership in a way that’s indirect or via influence. And this is great preparation for the world of entrepreneurship and many of the elements of life. All of us are going through life with a story running through our head. In fact, the vast majority of us are going through a collaborative story, because we’re not the only people in our narrative. Life is about finding a way to collaborate to tell a much better story together.
Game #3: Star Fleet Battles
Star Fleet Battles is a classic wargame that is based on the Star Trek universe. Because it was created in 1979, it predates all of the movies and television shows except for The Original Series and The Animated Series. So if you’ve been raised on the movies, the Next Generation, or the Kelvin Timeline, there will be many elements of Star Fleet Battles that will seem unfamiliar.
I was drawn to the game by the Star Trek connection, but kept playing it because of its complex (and educational) game mechanics.
One area in which Star Fleet Battles excels is its focus on a topic near and dear to actual military leaders and thinkers: logistics and materiel. You can’t win a war if you can’t establish and maintain your supply lines. Napoleon failed in Russia because his supply chains failed during the frigid Russian winter.
When you play Star Fleet Battles, logistics is a core part of the game. You have to configure your equipment and supply lines according to your expected battlefields, and then consider your opponent’s equipment and supply chains as well.
The same thought process applies when you’re running a business.
You have to configure your product and establish a supply chain that can deliver it to the market. You have to understand the battlefield in the customer’s mind, and reconfigure and refine your product faster than your opponent.
Another area in which I learned lessons from Star Fleet Battles is the importance of operational security and deception. I’m not talking about deceiving your customers by lying about your product; that’s just wrong and immoral. I’m talking about deceiving your competitors by concealing your intentions, or by using counterintelligence to convince them to draw the wrong conclusions about your plans.
For example, I tended to play as either the Romulans (one of Captain Kirk’s traditional enemies) or the Federation (Captain Kirk’s side). The Federation starships were the best generalists. If you didn’t know what challenges or conflicts you would face, playing the Federation maximized my flexibility and adaptability. But when I knew the battlefield in advance, I’d often select the sneaky Romulans, whose cloaking devices allowed their ships to become invisible.
My strategy was to build small, cheap Romulan vessels that weren’t that good in a fair fight, but were excellent at laying invisible space mines while cloaked. I would lay a minefield and then during the actual combat, I would use my opponents’ aggressiveness to lure them into range.
My opponent would be thinking, “He’s retreating, and exposed his flank! If I strike quickly, victory will be mine.”
Meanwhile, I would be thinking, “Come closer. I’m weak and vulnerable…except for the fact that you’ll have to cross a massive minefield to reach me!”
Yeah, that was fun.
This, by the way, is an important illustration of how strategy and tactics come together. Laying mines is a tactic. Luring overly aggressive opponents into a minefield is a higher-level strategy, but it only works if you have the tactical skill to convince your opponent to fall for your trap. And if my opponent didn’t take the bait? I had a Plan B, of course, but I’ll keep that to myself for now, in case we ever end up playing Star Fleet Battles together.
In the real world, Apple is a particular master of this strategy. It’s a firing offense to reveal anything about upcoming products. This operational security pays off when Apple surprises the market and its competitors with new products, giving those products as much time as possible to exploit that surprise by locking up market share and building customer loyalty.
Game #4: Wooden Ships and Iron Men
The next game we’re going to discuss takes us from Captain Kirk and the 23rd century to Captain Jack Sparrow and the 19th century. Wooden Ships and Iron Men is a naval warfare boardgame that tries to simulate naval combat in the Age of Sail, when wooden ships fired broadsides of cannonballs at each other.
The reason I found the game so educational is the emphasis on rapid iteration. The mechanics are deceptively simple – you can move, and you can fire your cannons. But the key question is when to move and when to fire, because you can only fire once per turn. Meanwhile, if you fire first, you might be able to reduce your opponent’s firepower, but if you fire too early, you’ll do less damage, and leave yourself vulnerable to a more patient opponent who can optimize their broadside.
My mind would be racing, trying to predict what my opponents would do, while trying to maneuver my ships into an advantageous position. The result is a rapid cycling between strategy (the plan you made before the round) and tactics (making moment by moment decisions on movement and when to fire cannons), with immediate feedback that would inform your decisions for the next turn.
It is a game of iterative scenario planning. You’re coming up with scenarios and a plan for every turn, but also recognizing that the battle is a dynamic system where your actions will cause your opponent to change their decisions and actions.
Game #5: The Settlers of Catan
The Settlers of Catan (or simply Catan) is part of a phenomenon known as “German games”. Because of work mandates, all the members of German families tend to get home at around 5 PM, leaving much more free time for a family to play games together. Germany buys more board games per capita than any other country in the world! In addition, post-World War II German culture’s aversion to direct conflict and warfare led German families to shun traditional wargames. The result was a new genre of games, focusing on economics and resource acquisition, with multiple paths to victory.
Catan, published in 1995, became an international hit, and popularized the German game genre throughout the world, including in America.
Like most German games, Catan is a lot more complex than an American board game, with a much deeper ruleset. My recommendation is that if you haven’t played before, don’t just read the rules and start playing. Instead, find an experienced player and ask them to teach you by playing a set of different teaching games.
For example, when I’m teaching friends, we play with everyone’s cards visible. This allows us to play together and use each player’s turn as a teaching tool. Playing cooperatively helps all the novice players to learn to distinguish between good and bad decisions more quickly.
I was introduced to Catan by my friend Tom Todaro, with whom I worked together at PayPal. Tom asked me if I’d ever played Catan. When I answered no, he said, “Well, you should!” At this point, it had been decades since I’d played a board game, and of course I got slaughtered the first five to 10 games that I played. I got better.
The reason why I then became a propagator of the game, teaching other people how to play, is that I decided that Catan was the game that came closest to approximating the challenges of entrepreneurship.
First of all, it’s a resource and building game, which ties in with the creative nature of entrepreneurship. But more importantly, the game centers on a trading mechanic, which drives an intense but fun social dynamic (at least I find it fun!). All of the players are trying to win, but they have to cooperate on these trades. You might need to convince another player to trade with you rather than a third player, and each of you brings your own agenda to the transaction.
This maps well onto entrepreneurship in Silicon Valley. Entrepreneurship isn’t a solo endeavor; you’re “trading” with investors, with customers, with employees, with suppliers, and with partners. And just like a game, entrepreneurship also includes the elements of probability and luck. You might have a good initial strategy, but if the “dice rolls” radically change the situation, you have to alter your strategy accordingly. Fortunately, just like in Catan, there are multiple paths to winning, and even if you start down one oath, it’s often not too late to shift to an alternate path. (If you’re a Catan geek, it’s like the discovery card strategy!)
I’ve been playing Catan for two decades now, and it remains my favorite game for teaching entrepreneurial strategy.
To many, games are a source of harmless fun. To me, they are a source of seriously productive fun.
Games are a great way to spend an enjoyable and educational time together. You might learn strategy and tactics, and you might learn about each other (and yourself) through competition, cooperation, and negotiation (and hopefully without angrily flipping over a game board).
As we wrote in the Startup of You, life – especially entrepreneurship – is a team sport, not an individual one. And games are one of the best ways to learn to play and love that sport.