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March 17, 2015

5 Startup / Product Strategies I Learned By Playing Risk

Risk, the game

While many popular smartphone games offer precious little other than a mind-numbing way to squander your time and a great way to keep your fingers in shape (think Flappy bird or Candy Crush), some, I believe, allow one to develop very sound and transferable learning on strategies that can be applied to startups (or, for that matter, any product development).

Risk, is one such game. Originally a board game first launched in the 1950’s, I prefer to play it on my phone (as it mitigates the effect that the game can have on friendships). For those of you who play the game, many of the strategies presented below may be very apparent, but it’s how they apply to early stage startups and product development that I find intriguing. For those of you who haven’t played, do it now (or get Lux Touch, a knock-off from the original, that I personally prefer…it’s free).

1. Focus your resources

In the early stages of the game, calculated, focused efforts are key. Try not to tackle too many product features & markets at once, as you will fail and competitors who are more focused on those fronts will dominate you.

Much of this also applies to early-stage startups, where focusing on product development (and not getting distracted by funding, PR and branding efforts), is key to gaining traction and thereby allowing for the rest to follow suit far more effortlessly.

2. Dominating a particular product feature or market, will lead to revenue generation sooner

A follow on from the previous point—it’s always tempting to try to tackle everything at once, whether it be features or geographic markets, but focusing on a particular niche can be an incredibly effective way to gain traction and revenue sooner, and thereby allow faster expansion by applying learning and revenues into broader contexts.

Many years ago, I founded a boutique digital agency (Versaris), which although initially promising, ultimately went under, suffering from this very problem. Based principally in Shanghai and Hong Kong, we were enticed by the prospect of clients in Europe and Australia, which proved too great a distraction for us—trying to be everywhere at once—and caused us to neglect our clients and opportunities in Asia. A big mistake that led to our eventual demise.

3. Acquiring competitors can lead to rapid growth

Depending on the market you’re in, organic growth can actually be riskier than aggressively expanding. I realise this is somewhat contradictory to the previous point, but the key to doing this successfully, as any experienced Risk player will tell you, is all about successful acquisitions.

In the game, you and your competitors collect ‘cards’ for every conquest won, not unlike a company’s resources (good hires, clients, IP, rep, and revenue streams) that you and your competitors generate over time. Acquiring a competitor with the right resources to leverage in combination with yours, can be all it takes to successfully execute on rapid expansion.

A perfect example of this is the digital agency POSSIBLE (a former employer of mine), who, by acquiring a number of regional competitors have, within the span of only a few years, become WPP‘s largest digital offering and, according to Ad Age, one of 10 Agencies to Watch in 2014.

4. Strengthen areas of your product or business that matter (in other words, are susceptible to attack by competitors)

In the game, occupying and holding on to a continent requires you to strengthen your borders, while interior territories of a continent play a much less important role and require no placement of soldiers (your resources). A business or product is exactly the same — there are aspects that require little to no investment, and others that are key to ensuring your strength and competitive advantage.

Some examples of the former include how you handle your accounting, HR tools, self-hosted server architecture, expensive offices and superfluous equipment. In the case of product development, it’s the difference between a bloated solution (with loads of nice to haves but poor execution on core features) vs adopting lean UX principles. On the other hand, examples of things that need to be strong in order to prevent a competitor from gaining traction:

  • The quality of your core product features. When it comes to quality, always be miles ahead. Google and Apple are great examples of this; no competitor comes close to their offerings and the amount of time and resources spent on R&D eclipse national GDP’s of many large nations.
  • Your sales pipeline and client retention. According to Donald Keough (former President of Coca Cola International), in his book “The Ten Commandments for Business Failure“, every single person in your organisation should somehow be contributing to either sales or client retention. If they’re not, they belong to the “do not invest in this” category.
  • How you treat your people. Reward and look after your employees, better than any one else in the market. There’s nothing worse than a dissatisfied employee who has joined a competitor (and taken with him valuable IP and operational know-how). I wonder how many additional competing entrepreneurs Google would have, if they didn’t treat their staff as well as they do.
  • Many many more.

5. Geography matters

In the game, occupying North America, Europe and Asia can be much more rewarding (in terms of the number of troops you generate every round), but they are also much harder to dominate and hold on to. More importantly, strategically speaking, having a stronghold in a particular geography can lead to easier expansion into others.

For example, the easiest way to dominate Asia, is to have a strong foothold in Oceania, that eventually expands into the former. While perhaps counter-intuitive to entrepreneurs residing in the US or Europe, many Australian-based businesses profit greatly from the geographic proximity (and manageable time-zone difference) the country enjoys in relation to China and the rest of South-East and East Asia.

Similarly, a dominant presence in the US, will lead to easy expansion into Latin America (given close geographic proximity, ease of accessing talent with cultural and lingual ties, and a transferrable brand reputation).

Conclusion

There’s a reason why chess is regarded in such a favourable light by leading executives (and why grandmasters are often sought out for leadership roles). I would argue that Risk, as a tool for nurturing sound strategic thinking, occupies a comparable station. I would love to hear what others have to say on this, along with suggestions for other games that offer similar benefits.

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