Thinking Better

Are You Playing to Play, or Playing to Win?

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My friend Lesley has this thing where she says “make sure you’re playing the real game, not some more complicated game you’ve made up for yourself.”

I think about this a lot.

Lesley says this in the context of Ultimate — she was a coach for the Singaporean women’s world championship team. She says that when she was a player, she believed that certain methods of winning in frisbee were more legitimate than others. Preferably, you wanted to win with strategies that were technically sophisticated and elegant and difficult to do. But as a coach, she’s had to remind herself that the goal for her team is to win, not to set unnecessarily high bars for play.

I played Judo very competitively when I was younger. For about two years when I was 18, my entire life was school, training and sleep. The only problem was that I wasn’t very good at it. I had it in my head that the only Judo worth playing was a ‘Japanese’ style of Judo — an upright, dynamic, beautiful style. No other style, I thought, was worth looking at — not Georgian, not Mongolian, not even French.

The problem: kids in Japan start at around six years of age; I started playing Judo at 15. There was no way I could have won using the Japanese style. It simply demanded too much technical proficiency. And so while I was good enough to be selected for my state, I never did do well in the National Championships.

Contrast this to other, smarter competitors. American Olympian Jimmy Pedro said, of his father: “My dad was a guy who started Judo when he was 19 years old. So he was way behind the eight ball against everyone else; he was trying to go to the Olympics. Gripping was something that was introduced to him in his early 20s. And he realised that if he learned to grip fight properly, he could beat those technicians who had been playing Judo since they were five or six years old. Because it’s hard to get a natural feel for the sport when you start so late — like you’re never going to be as instinctually as good as somebody who starts when they’re a kid. But my dad learnt that gripping was a way to get good fast.”

To expand on that a little, in Judo, grip fighting is what happens before you can throw. The competitor that consistently gets a superior grip determines the pace and shape of the match. Pedro and his father are perhaps most famous for systematising the grip fight — that is, they turned it into something that could be taught to all players, instead of relying on unsystematic tricks, or on intuition acquired through a high volume of sparring.

They did this not because they thought grip fighting was sexy — quite the opposite. Grip fighting, as the Pedros taught it, could be used as a tool to nullify your opponent's Judo. After all, your opponent couldn’t throw you if he couldn't get a grip. This often didn’t result in the dynamic Judo that I so loved as a youth; in many cases, it resulted in boring matches, won on small points or penalties.

The Pedros taught gripping because they wanted to win.

More importantly, though, Pedro brought this thoughtful, strategic approach to every aspect of his coaching. In his interview with Lex Fridman, he says, rather frankly:

We know that we cannot beat the Russians, we cannot beat the French, we cannot beat the Brazilians, we cannot beat the Japanese by doing more Judo than they do. Because it’s impossible. We can’t beat them with Judo, because they have way more people to train with, way more opportunity, so we have to beat them with … physicality, technical strategy, gripping, newaza, conditioning, toughness … in the mindset, that we’re going to win, and this is how we’re going to win, and you have to get your students to believe in the system.

Pedro never won gold at the Olympics. The best he got was bronze. But he coached a whole bunch of Americans who titled internationally, and he coached Kayla Harrison, the first American ever to win an Olympic gold in Judo. He is as believable as they come.

I wished I’d learnt this alternative view of competition earlier in my life. As a competitor, I didn’t think very deeply about the constraints that I was facing, and I didn’t have a coherent strategy to win. I simply thought to myself: “Ahh, the Japanese play beautiful Judo. That’s the best form of Judo, and the only form of Judo worth playing. I want to be like that.” And then I refused to look at other styles.

I was, in other words, a scrub.

Being a Scrub

In the world of gaming, a scrub is someone who isn’t playing to win. This sounds a little bizarre — what competitor isn’t playing to win? I’ll let Street Fighter tournament player and game designer David Sirlin explain:

"Scrub" is not a term I made up. It sounds like kind of a harsh term, but it's the one that was already in common usage in games to describe a certain type of player, and it made more sense to me to explain that rather than to coin a new term.

A scrub is not just a bad player. Everyone needs time to learn a game and get to a point where they know what they're doing. The scrub mentality is to be so shackled by self-imposed handicaps as to never have any hope of being truly good at a game. You can practice forever, but if you can't get over these common hangups, in a sense you've lost before you even started. You've lost before you even picked which game to play. You aren't playing to win (emphasis added).

A scrub would disagree with this though. They'd say they are trying very hard. The problem is they are only trying hard within a construct of fictitious rules that prevent them from ever truly competing.

Sirlin continues with an example from the fighting game Street Fighter:

Scrubs are likely to label a wide variety of moves and tactics as "cheap." For example, performing a throw in fighting games is often called cheap. A throw is a move that grabs an opponent and damages them even while they're defending against all other kinds of attacks. Throws exist specifically to allow you to damage opponents who block and don't attack.

As far as the game is concerned, throwing is an integral part of the design—it's meant to be there—yet scrubs construct their own set of principles that state they should be totally impervious to all attacks while blocking. Scrubs think of blocking as a kind of magic shield which will protect them indefinitely. Throwing violates the rules in their heads even though it doesn't violate any actual game rule (emphasis added).

(…) Complaining that you don't want to do X in a game because "it doesn't take skill" is a common scrub complaint. The concept of "skill" is yet another excuse to add fictional rules and avoid making the best moves. Curiously, scrubs often talk about how they have skill whereas other players—very much including the ones who beat them flat out—do not have skill. This might be some sort of ego defense mechanism where people define "skill" as whatever subset of the game they're good at and then elevate that above actually trying to win.

For example, in Street Fighter scrubs often cling to combos as a measure of skill. A combo is sequence of moves that are unblockable if the first move hits. Combos can be very elaborate and very difficult to pull off. A scrub might be very good at performing difficult combos, but not good at actually winning. They lost to someone with "no skill."

Single moves can also take "skill," according to the scrub. The "dragon punch" or "uppercut" in Street Fighter is performed by holding the joystick toward the opponent, then down, then diagonally down and toward as the player presses a punch button. This movement must be completed within a fraction of a second, and though there is leeway, it must be executed fairly accurately. Scrubs see a dragon punch as a "skill move."

One time I played a scrub who was pretty good at many aspects of Street Fighter, but he cried cheap as I beat him with "no skill moves" while he performed many difficult dragon punches. He cried cheap when I threw him 5 times in a row asking, "is that all you know how to do? throw?" I told him, "Play to win, not to do 'difficult moves.'" He would never reach the next level of play without shedding those extra rules in his head (emphasis mine).

For me, one Judo equivalent to ‘not using Street Fighter throws’ was usage of the high collar grip. Most Judo competitors learn from an early stage to grab their opponent’s high collar — because this gives you greater control over your opponent’s head. I was told not to use it, due to the height disadvantage I had when I was 15. Along the way this turned into a scrub rule — I felt like I was extra worthy if I managed to win without grabbing the high collar.

Looking back, I think this was dumb — but I was young and stupid and didn’t know any better.

Scrubs in Business

Is there scrub behaviour in business?

Almost certainly: one trivial example is the stance that I alluded to in Changing My Mind on Capital — the idea that bootstrapping without ever selling equity to external investors is somehow a better way of doing business. I argued that this was silly, that capital was a tool, and that having beliefs about using capital was more ideological than it needed to be. But perhaps bootstrapping with no external funding is better. We do seem to admire it when it happens.

Talking about scrub-like behaviours in business is where our discussion becomes more nuanced and interesting. When is scrub-like behaviour truly scrub-like? And when is it ethics?

Long-term readers of Commonplace would know my admiration for John Malone, the onetime CEO of cable company TCI. In The Games People Play With Cash Flow, I wrote:

Malone was, essentially, a hacker: he stared deeply at the thicket of accounting rules, tax laws, and possible business moves, and found a strategy that exploited the structural realities he found in front of him. He was the first person to deploy this playbook rigorously, and TCI was amongst the first companies to start using EBITDA as a financial metric.

In my eyes, Malone is an almost perfect example of a non-scrub — a person who saw into the game of business, and played the actual game, not some made-up, more difficult version of the game. Malone’s insight was that he could load TCI up with debt (at a disciplined five-to-one earnings ratio), and then use the interest payments and cable equipment depreciation as a tax shield for TCI’s utility-like, monopoly cash flows. He then used that debt to expand aggressively, gaining scale advantages, until TCI became the largest cable company in the US, owning interests in various cable programming and tech ventures along the way.

What I’ve never written about, though, is the flip side of Malone’s reign as TCI’s chief — that is, that Malone treated his customers as an afterthought. This was a side-effect of the ‘monopoly’ in ‘monopoly cash flows’ in my description above — due to the nature of cable rights (again: a government-granted monopoly, so not ostensibly an evil thing), operators didn’t really have to worry about competition, and some were willing to let cable systems degrade over the years.

Malone, of course, took this to an extreme. In The Outsiders, William Thorndike writes:

Until the advent of satellite competition in the mid-1990s, Malone saw no quantifiable benefit to improving his cable infrastructure unless it resulted in new revenues. To him, the math was undeniably clear: if capital expenditures were lower, cash flow would be higher. As a result, for years Malone steadfastly refused to upgrade his rural systems despite pleas from Wall Street. As he once said in a typically candid aside, “These [rural systems] are our dregs and we will not attempt to rebuild them.” This attitude was very different from that of the leaders of other cable companies who regularly trumpeted their extensive investments in new technologies.

Ironically, this most technically savvy of cable CEOs was typically the last to implement new technology, preferring the role of technological “settler” to that of “pioneer.” Malone appreciated how difficult and expensive it was to implement new technologies, and preferred to wait and let his peers prove the economic viability of new services, saying of an early-1980s decision to delay the introduction of a new setup box, “We lost no major ground by waiting to invest. Unfortunately, pioneers in cable technology often have arrows in their backs.” TCI was the last public company to introduce pay-per-view programming (and when it did, Malone convinced the programmers to help pay for the equipment).

Over the course of Malone’s two decades of leadership, TCI earned a reputation for poor customer service and ‘unjustified’ price hikes. It let its systems rot. As a result, it was hated to varying intensities by customers, local government officials, and politicians alike. Malone didn’t care. He played the game according to the rules of the game — and the rules of the game, as he saw it, was that monopoly-type markets allowed businesses to ignore customer happiness. And he was right. He only upgraded when absolutely necessary — such as when satellite competition emerged in the mid-90s.

As I was reading Malone’s story, I remember thinking to myself: if I were in his shoes, would I be willing to play the game the way he played it? Or would I have spent some of that cash flow to upgrade systems, at the expense of expansion, market share, and better unit economics?

I’d like to think that I would’ve upgraded, that I would have had more empathy for my customers — but then does that make me a scrub? Consider: system upgrades had no positive effect on the performance of a cable business. If nothing else, the capital outlay (and accompanying debt load) often made smaller cable companies more fragile — and Malone was always eager to snap up distressed cable systems on the cheap.

In other words, if I’d played the ‘customer-service’ game, it is likely that I would’ve failed, and sold to someone like Malone. But perhaps there was a way around it? The difficulty of business — and the difficulty of thinking about scrub behaviour in business — is that the rules are often only what you can discover to be true. (And even those rules may change, depending on the behaviours of competition). There is no explicit game designer to balance play in the markets; you are truly on your own.

And Yet There are Maestros

One reason that scrub behaviour is so compelling to us is that we admire those who decide to play a harder game, and who manage to win anyway.

In Judo, the best contemporary example might be Shohei Ono, who won his second Olympic gold in the -73kg category at Tokyo, as part of a seven year undefeated streak. Ono consistently wins by dominant throw, choke, or pin; he never aims to win by penalties alone. And those in the Judo world love him for it — we know that he is playing a more difficult game, with more constraints than his competitors, and we love that he wins so consistently despite the ‘handicap’.

A more mainstream example, however, might be Roger Federer. Federer uses a one-handed backhand — a notoriously more difficult technique than the two-handed version. He also happens to make it look easy. We don’t love him for that, of course — we love him because he does it while absolutely dominating the highest levels of tennis — at least for the good part of two decades. And so to watch Federer play a tennis match is a little like watching God play tennis — or perhaps, more accurately, like watching a version of tennis that is more ballet than racquet sport.

This, I think, is what mastery looks like. Federer, like Ono in Judo, is a maestro. The uncharitable implication is that a maestro is simply a scrub who wins. We can’t believe that they do it. But we stand in awe of them because they do it anyway, and win.

Are there examples in business? Certainly.

A friend of mine was telling me about Martine Rothblatt’s United Therapeutics. Rothblatt started UT in 1996 to save her youngest daughter, who had an orphan disease called pulmonary arterial hypertension (PAL). In her interview on the Tim Ferriss podcast, Rothblatt explained the genesis of her company:

So there are a good zillion articles published on every type of medical research you could imagine. I mean, it’s just a bottomless well. There are literally hundreds of different types of medical journals. And each of those journals have every year thousands of articles published across them. So it’s difficult to find the information that you need, but in law school, we learn a very useful skill. And this skill goes by the name of Shepardizing, after this type of index they have in law school called Shepard’s. So what Shepardizing involves is when a judge writes a decision like the Supreme Court issues a decision, they drop a lot of footnotes. And of course, one thing lawyers love to do is make footnotes and references. And then what you’re supposed to do as a good lawyer is to look up all of the footnotes and the references that that Supreme Court or lower court case referred to. And then the Shepardizing process is after you get all of those references to then look up all of the references in those other articles. And ultimately, you get to a point of diminishing returns where three, four, five levels down, the references are all circling back around on themselves.

So I applied that Shepardizing process to these medical articles, and somewhat like doctors, whenever a researcher publishes an article, they make footnotes and citations to other people’s research who they relied upon. So I would get all of those articles and read those. And then I would follow up on all of the references in those. Finally, I read about a molecule that a researcher at Glaxo Wellcome had written in which they described testing this molecule for congestive heart failure. And it failed in its test of congestive heart failure. It did not work, but in the article, they had charts of what the molecule did. And the one thing that the molecule did that grabbed my attention was that it reduced the pressure between the lung and the heart, which is called the pulmonary artery. It reduced the pulmonary artery pressure while leaving the pressures and all of the rest of the body perfectly fine. Well, that’s exactly the problem with pulmonary arterial hypertension, the people who have this disease.

Rothblatt then went to Glaxo Wellcome to ask about the molecule, but was told that they weren’t going to develop it:

The individual who had written the article had actually retired a few months earlier. And the person that I ended up meeting with, who was in charge of research and development, said that this was just one article. It was an incidental finding. In any event, this disease afflicted so few people, it was completely unrealistic to expect Glaxo Wellcome to develop this molecule for my daughter and other people with that disease. And I asked him, his name’s Bob Bell, he’s now a venture capitalist and very successful gentleman. I asked Dr. Bell, I said, “What would it take for you to develop this medicine?” He said, “Well, it probably would take — you couldn’t do it. We only develop medicines if they have more than a billion dollars a year in revenue potential.” He said, “But it’s possible you could buy it from us. If you had a real pharmaceutical company with real pharmaceutical expertise, I could then introduce you to the business development people at Glaxo Wellcome.”

Which is what she did.

Rothblatt sold her stake in SiriusXM (a company she had co-founded), started a biotech company within a few months after the conversation, got Glaxo Wellcome to sell her the molecule, and then turned it into a drug that eventually saved her daughter and countless others with PAL. As a twist in the story, Glaxo Wellcome had only asked for $25,000 and 10% of the revenues from the patent, since they were not expecting to make any money from it. To hear Rothblatt tell it, UT has paid back more than a billion dollars in royalties to Glaxo Wellcome in the years since they first brought the drug to market.

Much later, UT acquired the technology to refurbish human lungs for transplantation. But Rothblatt wasn’t happy about the carbon costs of flying damaged organs to their facility and then back out to the hospitals — she thought that it was awfully wasteful to have a such large carbon footprint, even if it was for a good cause.

So, of course, they started developing electric helicopters.

Rothblatt, again on the Tim Ferriss podcast:

But I mentioned this because this has a lot of flying around; flying here, flying there, helicopters going back and forth, planes. And if I’m going to make an unlimited supply of organs, and you remember all those numbers we talked about at the beginning of the call, the hundreds of thousands of people who need these organs, that is going to be a humongous carbon footprint. We could have said to ourselves, “Well, we’re doing such a good thing. We’re saving all these lives. We could be permitted to foul our atmosphere because it’s balanced by the good things we’re doing.” But instead, we like to ask ourselves the challenging question, “How can we do the good thing and the right thing at the same time? How can we manufacture all these lungs and deliver them with a zero-carbon footprint?”

And the solution came from the technology of electric helicopters, which are powered by renewable energy that can fly these organs from one place to the other without adding any carbon footprint at all. And I will be a little bit of a soothsayer here, I am absolutely convinced that in this decade, the 2020s, we will be delivering manufactured organs by electric helicopter.

Will they succeed? I don’t know. But I certainly want them to. And my friend, who owns shares in UT more out of awe than anything else, says that it’s ridiculous that a biotech company would want to go beyond doing good to doing right by the environment. A more normal response would be to buy carbon offsets and to call it a day. Making investments in electric flying is another thing altogether.

I think Rothblatt deserves to be called a maestro. And I hope that the markets that UT plays in affords them the ability to play the harder game and win.

Wrapping Up

What should we conclude from this discussion? I keep going back to Lesley’s original framing: “make sure you’re playing the real game, not some more complicated game you’ve made up for yourself.”

This is, of course, easy to say. Nobody wants to be called a scrub. But when all is said and done, there are aesthetic and moral reasons to want to play a more difficult game.

One of the funny ironies of this discussion is that Federer himself wants his kids to learn the double-handed backhand. In a press scrum in 2019, he said:

“I know I love tennis and going out there to play. I would go for a two-handed backhand for all of my four kids because it's easier; it's that simple. If they want to change that later on, I will teach them to hit a one-handed backhand.

“But I can't teach them a double-hander as I can't hit that one. So that's somebody else's job. At the end of the day, like with everything in life, you also have your own character. Some people decide to change it at eight, some at 14 and some later because they find it a good challenge.

“For now, that's what it is. And, who cares anyway if they hit a double-hander or not? It shouldn't be in the press.”

There’s this old nut by Warren Buffett that goes “I don't look to jump over seven-foot bars; I look around for one-foot bars that I can step over.” I think that captures the essence of not being a scrub.

The irony, of course, is that it was uttered by a maestro — and arguably the greatest investor to have ever lived. But you only get to be called a maestro if you play the harder game and you win. For everyone else, it’s probably a better idea to avoid being a scrub. Winning is hard enough as it is.

Originally published , last updated .
  

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