Game Theory Infinite vs Finite Games and how it can massively TRANSFORM your business... 🔥👨🏻 THIS IS REALLY COOL! Ep 60

In a discussion on game theory's application to business, the host reflects on a recent gym summit and delves into the distinction between finite and infinite games, as described by Simon Sinek. Finite games, like baseball, have clear players, rules, and objectives, while infinite games involve known and unknown players, changeable rules, and the goal of perpetuation. The host, inspired by this concept, re-evaluates competitive business strategies, emphasizing the importance of longevity over short-term wins. This shift from a finite to an infinite mindset encourages sustainable growth, customer service, and reputation management, with the ultimate aim of staying in the game. The host draws parallels to fitness and relationships, where the same infinite game principles apply, advocating for a long-term, sustainable approach in various aspects of life and business.

• Speaker A shares their excitement about learning game theory after a large event.
• They express how game theory has fundamentally altered their perspective on business, competition, and the market landscape.
• The speaker aims to convey the insights gained from Simon Sinek's video on game theory.

"But there was one great video that I watched by Simon Sinek about game theory and how it relates to business. And I thought, for me, I'm, like, geeking out about it, and it really has, I would say, has fundamentally changed, which is a really strong statement. Fundamentally changed how I see our business, how I see competitors, and how I kind of see the landscape, and hope you allow me to share it with you."

The quote highlights the speaker's enthusiasm for game theory and its significant impact on their understanding of business dynamics. It sets the stage for the discussion of finite and infinite games as it applies to business strategy.

• Finite games have known players, fixed rules, and an agreed-upon objective.
• The goal of finite games is to win.
• Baseball is used as an example of a finite game, with clear teams, rules, and the objective to score more runs than the opponent.

"Finite games are defined as games where you have known players, fixed rules, and the objective is agreed upon. [...] So an example of that would be like baseball. So, with baseball, you have known players, you got two teams, the rules are fixed, they're not changing. The rules of baseball are the same, and the objective is to, when the game finishes, have more runs. The other person. Right? That's how it works."

This quote explains the characteristics of finite games and provides a concrete example. It is relevant for understanding the concept of finite games in contrast to infinite games.

• Infinite games have both known and unknown players.
• The rules in infinite games are changeable.
• The objective of infinite games is to keep the game going.
• The speaker is fascinated by the concept of infinite games.

"Now, the inverse of that is an infinite game. And infinite games are. I'm, like, so fascinated by this. Anyways, so the players are both known and unknown. The rules are changeable, and the outcome is to keep the game going."

The quote introduces the concept of infinite games, emphasizing their dynamic nature and the ongoing objective, which contrasts with the win/lose goal of finite games. This is critical for understanding long-term business strategies and competitive environments.

• The U.S. approached the Vietnam War as a finite game with the objective to win.
• The Vietnamese were playing an infinite game with the goal to keep the game going and stay alive.

"Now, where this is, here's an example of the infinite game. So the US, when they were fighting Vietnam was. We went in to go and win, right? The Vietnamese were playing to stay alive, to keep the game going, right?"

This quote provides a historical example illustrating the difference between approaching a conflict with a finite game mindset versus an infinite game mindset. It underlines the importance of recognizing the type of game being played in various contexts, including business and warfare.

• Finite players engage in games with clear endpoints, like baseball.
• Infinite players are involved in games with no defined endpoint, such as geopolitical conflicts.
• When finite players compete against each other, the system is stable.
• Infinite players only stop when they run out of resources or will to continue.
• The US vs. Russia in the Cold War exemplifies an infinite game where Russia ceased to play due to resource depletion.
• Stability exists when two finite players or two infinite players compete.
• An unstable game arises when a finite player competes against an infinite player.

"So what happens is that when you have a finite player versus a finite player like baseball, the outcome is stable."

This quote explains that when both competitors have the same mindset and goals with clear endpoints, the competition remains stable.

"If you have an infinite player against an infinite player, like the US with Russia in the cold war... Russia ran out of the resources to continue to play, and then the game finished."

The quote illustrates how infinite games can end if one player cannot sustain the competition, as was the case with Russia in the Cold War.

"When you pit a finite player versus an infinite player, the game is unstable."

This quote highlights the inherent instability when competitors with different mindsets (one aiming for a definitive victory and the other for ongoing survival) face off, leading to a mismatch in strategies and objectives.

• The US invasion of Vietnam is an example of a finite player (US) against an infinite player (Vietnam).
• The US aimed to win while Vietnam fought to survive, leading to US withdrawal.
• Russia's invasion of Afghanistan mirrors this with the mujahideen's persistence outlasting Russia's will to continue.

"And so that's exactly what happened, for example, with the US invading Vietnam, right? So we came in to win, the Vietnamese came to stay alive."

This quote provides a historical example of the instability caused when a finite player faces an infinite player, resulting in the finite player's withdrawal.

"Same thing happened with Russia when they invaded Afghanistan."

The quote draws a parallel to another historical conflict where the mismatch of finite and infinite game mentalities led to the finite player's retreat.

• The podcast's growth relies solely on word of mouth.
• The host does not use ads, sponsorships, or sales to promote the podcast.
• Listeners are encouraged to share the podcast as they learned about it.

"The only way this grows is through word of mouth."

This quote emphasizes the importance of listener recommendations for the expansion of the podcast's audience.

• Business can be viewed through the lens of finite and infinite games.
• Entrepreneurs often default to a finite game mentality due to upbringing and education.
• This mentality is reflected in focusing on short-term metrics like revenue.

"A lot of us, myself included, sometimes we fall into the finite game mentality."

The quote reflects on the common tendency among entrepreneurs to adopt a finite game approach in business, often prioritizing immediate, measurable outcomes.

"We're raised on a finite game system, which is like, get an a score, more goals, whatever, right?"

This quote explains the origin of the finite game mentality, rooted in the education and upbringing that emphasize clear, quantifiable achievements.

• The notion of being "number one" in business is ambiguous without a clear objective.
• Different metrics can be used to claim the top position, such as revenue, profit, employee count, or square footage managed.
• The idea of being number one is often a self-imposed goal with arbitrary standards.
• Being number one is a temporary status due to the dynamic nature of business.

"But the reality is, under what, there's no agreed upon objective. I can say we're number one in what revenue? Or do you want to talk about profit? Or do you want to talk about how many employees you have or in terms of how much square footage you have under management, whatever, right?"

This quote highlights the lack of universal criteria for being "number one" in business, suggesting that such a goal is subjective and can vary based on different business metrics.

• Business should be viewed as an infinite game where the objective is to keep playing, not to win in a finite sense.
• Shifting perspective from outplaying competitors to outlasting them can change business strategies.
• The infinite game redefines winning as the ability to continue playing, which provides a sense of peace and long-term thinking in decision-making.

"And so the game of business is not a finite game, despite the fact that a lot of us and a lot of players in the space play the finite game, that's actually an infinite game. And the objective is to keep playing, right?"

This quote explains that business is not about reaching a definitive end goal but rather about sustaining the ability to operate and thrive indefinitely.

• Embracing the infinite game concept influences how businesses approach competition, growth, and sustainability.
• It encourages long-term planning, such as making significant investments with a vision that extends beyond short-term gains.
• This mindset affects various aspects of business, including customer service and reputation management.
• It promotes a strategic, step-by-step approach to business development, focusing on gradual progress.

"But what it does is it fundamentally shifts how you do business. Because if the goal is to stay in the game, it really shifts from outplaying to outlasting."

The quote signifies a paradigm shift from competing to win in the short term to building a business capable of enduring and succeeding over time.

• Emphasizes the importance of creating something with the intention to last, rather than for immediate results.
• Discusses the negative impact of rushing decisions and the inability of the team to keep pace, leading to detrimental effects on the business and customers.
• Suggests operating under an 'infinite construct' rather than a 'finite construct' to alleviate self-imposed pressure and improve decision-making.

"Because if you're building it to last, rather than just trying to say, like, I'm trying to outsource my gym as fast as possible, right, I get it. But it's also not necessarily the wisest game to play, right."

This quote highlights the importance of focusing on long-term goals over short-term gains when building a business such as a gym.

"And what happens is a lot of times what we do is we make decisions and we go too fast and the team can't catch up, and then we end up blowing up a whole bunch of stuff and then suffering as a result."

The speaker warns about the consequences of hasty decision-making and the importance of ensuring the team can keep up to prevent negative outcomes for the business.

• Discusses how the concept of an infinite game applies to various aspects of life, including fitness and relationships.
• Encourages a shift in perspective to prioritize sustainability and long-term enjoyment in fitness, rather than short-term goals.
• In relationships, emphasizes the importance of maintaining love over time, rather than just the initial achievement of falling in love.

"You want to have people go in because they're trying to lose a certain amount of weight, or they come in because they're trying to achieve a certain body. But the real question is then what?"

The speaker challenges the common short-term goals in fitness, prompting listeners to consider the long-term implications and sustainability of their fitness journey.

"So marriage, it's not like no one's like, wow, that's an achievement. I fell in love. I fell in love. Like no one cares, right? It's like, okay, well, great, you fell in love. The point is whether you can stay in love, right?"

This quote draws a parallel between fitness and relationships, suggesting that the true achievement in love is not falling in it but staying in love over time.

• Expresses hope that the listeners find the discussion on infinite and finite games as interesting as the speaker does.
• Plans to deliver more talks on the subject due to its wide applicability.
• Ends with motivational remarks and a warm welcome to new group members, as well as an invitation for gym owners to collaborate.

"I hope you guys found that as interesting as I do. I think it's really fascinating. I'll probably be doing more talks in relation to this because I think the concept is so applicable."

The speaker shares their enthusiasm for the concept and indicates an interest in further exploring and discussing its applications in future talks.

"And for all my gym lords, lots of love, keeping awesome. And for those of you who knew this group, welcome to the group."

This quote serves as a sign-off, expressing affection and encouragement to the speaker's community, as well as welcoming new members to the group.