2 minute read
Out Islands, Bahamas
At Bigelow we are always all about practical application, but…sometimes it’s useful to gain a little perspective by refreshing our scholarship on pure theory to put our empirical and practical day-to-day Entrepreneur Owner-Manager scar tissue in context. The mental model I want to reflect on today is Game Theory.
As high-performing Entrepreneur Owner-Managers, all of us are familiar with the concept of the Zero-Sum Mindset (or Zero-Sum Game) where your gain always results in your competitor’s loss. It is a domain of scarcity, where one is competing over a fixed pie of resources that is awarded to either you, or to the competitor and the outcome is fixed—someone wins and someone else loses. Tennis. The maximum gain for you results in the maximum loss for your competitor, and the sum of your gains and losses is exactly zero.
A Positive-Sum Mindset (or Positive-Sum Game) on the other hand, is the notion that our engagement with others is in the domain of abundance, which actually results in a larger pie we each get a piece of, so that we are both better off. In a Positive-Sum Mindset, when we act in a coldly rational, self-interested manner, it advantages the other party the same amount that it benefits ourselves. In a way, we aren’t really even in “competition.” I cannot think of a single seasoned, successful high-performing EOM who doesn’t approach the world with a Positive-Sum Mindset. Most of us would say that specific mindset is the only way to have sustained success when we create value for all the parties in our enterprise.
Okay. So, a Zero-Sum Mindset is win-lose for competitors, and a Positive-Sum Mindset is win-win for both participants. But what about the rest of us in society? Are we benefited, harmed, or even at all affected by Zero-Sum or Positive-Sum Games?
I am inspired by the actions I witnessed recently by one of our friends/clients who is a super-successful, high-performing EOM in her domain. She described competitors moving in “down the street” (metaphorically speaking). When I expressed some regret that her success had attracted aggressive new competitors, she said, “Hey Pete, I love new competitors in our space. Why? We are trying to make a positive contribution to our customers here, trying to be useful in employing new, completely new, original techniques and technologies and…it’s hard work. If anyone else wants to try that I am all for it, because the more they invest in this area the more benefited our customers—and all of society—will be.”
Another example. Decades ago, in the beginning of my career with Bigelow, I was meeting one spring afternoon in Marblehead with world-renowned yacht designer and sailor Ted Hood (winner of the America’s Cup 1974), founder of Hood Sailmakers, Hood Yacht Systems, and Hood Yachts (and uncountable other entrepreneurial creativity). I was in my 20’s and I am guessing Ted was in his mid-50’s. Ted was incredibly creative and inventive, and among other inventions, had conceived and developed the Hood Stoway mast, an ingenious in-mast main sail furling system which allowed the main sail in a larger sailboat to roll into the mast with the push of a button, making it effortless to set, or reef, or furl. I admired the design and innocently commented to Ted, “I think the company’s Enterprise Value will be enhanced when you get a patent on this.” Ted looked at me in annoyance and said, “No patents, Pete. The thing is, we want all cruising sailors to adopt the Stoway idea. It makes it safer and easier for single-handed sailing, short-handed cruising, or just a husband and wife running a big boat by themselves. I am not worried about people copying us. They will. Maybe they’ll even improve it. But the thing is— it’s not “easy” to design, execute, or make work correctly consistently.”
I am tagging this the Exponential-Sum Mindset. These are the mindsets or games where the participants invite collaboration from all other parties (even competitors) with the belief that some/all of our gain will result in our societies or culture’s gain. It’s an Abundance Mindset. This mindset actively requests the participation of competitors and collaborators, in order to increase the size of the pie for all of us, with the positive externalities from that spilling over to the mass popular culture.
In my experience, all of the best Entrepreneur Owner-Managers are Exponential-Sum Game creators who through their own achievements, end up enriching others’ lives at the same time.
This spectrum of concepts of interactions (zero-sum, nonzero-sum, positive-sum, negative-sum, constant-sum, and variable-sum games) was introduced by John von Neumann and Oskar Morgenstern when they invented the mathematical theory of games in 1944. They didn’t mention Exponential Sum Games. The author Robert Wright sketched a similar arc in his book Nonzero (1999) (which I loved) and extended it to the deep history of human societies. Wright believes there is an explicit recognition among literate people of the shorthand abstraction “Positive-Sum Game," probably responsible for extending a process in the world of human choices that has been operating in the natural world for billions of years.
What I am Reading / Listening to
Joseph Campbell and The Power of Myth with Bill Moyers (DVD) (1988)
Produced by PBS
Decades ago I acquired a set of DVDs called Joseph Campbell and The Power of Myth. I’m not sure, but I think I paid like $89 for the set. It is a video and audio recording of the skillful Bill Moyers in a series of interviews with Joe Campbell many of which took place at Skywalker Ranch, George Lucas’ 4000-acre home/creative studio in Marin County north of San Francisco. George Lucas was an avid admirer of Campbell's writings, and stated he used them as a direct reference in his creation of Star Wars. The interviews took place just before Campbell’s death in the late 1980s. Joseph Campbell was expert in myths, a professor, writer, lecturer, historian, husband, friend. His wealth of knowledge on faith, philosophy, comparative mythology and just…humanity was astounding. He wrote on the order of fifty books. The one’s I’m most familiar with include The Hero with a Thousand Faces (1949), The Masks of God (1959), The Flight of the Wild Gander (1969), and The Ecstasy of Being (2017).
Over the years I intermittently watched/listened to the “Programs” in the Power of Myth series which begins with “The Hero’s Adventure” and ends with Program Six, “Masks of Eternity”, but boy was it hard to find time to physically sit down and watch the roughly six hour video (which nominally is only a video capture of what is essentially an audio interview). I always ended a video session looking at my watch and wishing they’d edited out the distracting images designed to entertain.
So recently, I gave away the darn DVDs and acquired the audible.com version of the Power of Myth program/book for a tenth of the cost which is naturally, audio only. As far as I can tell it’s the audio version of my old DVD. If you want a logical and empirical “proof” for the intimacy of audio over video, just come with me to listen to this interview. It moves our minds and hearts, and evokes a powerful sense of learning like video rarely does. Audio is intimate, it is portable, and there is an ineffable quality about it that makes you earn it, and for that reason perhaps, stick with you.
I can’t decide which I appreciate more—Joseph Campbell’s natural childlike sense of wonder about the universe and the role of we puny humans in it—or his mastery of the scholarship and material through a life of focused study on myths from all over the world. Maybe it’s both: the expert scholarship combined with the childlike wonder that inspires me. So much of what he explains about history, myth, and organized religions will resonate with any thinking person.
What an extraordinary time we live in. I am incredibly grateful that infinite learning, on any subject, by almost any expert, emits from a device we hold in our hand with only an investment of our attention.
Entrepreneur Owner-Manager Quote
“I can’t imagine being served at a higher level at a bigger firm. Bigelow engaged with all the right people and were great dealing with my family and employees. I didn’t expect to have trust be such a hallmark of our relationship.”
Last week I had the almost indescribable fun of visiting BETA Technologies, a start up company with a mission to build electric vertical take-off & landing (eVTOL) aircraft which has never been done before. Located in Burlington, VT, BETA is about seven or eight years old, has raised nearly $1 billion in venture capital, and has an extraordinarily credible Board of Directors and Founding Stockholders, including Martine Rothblatt, Dean Kamen, John Abele, Kyle Clark, and others. Let me just say that any new enterprise that Martine Rothblatt and Dean Kamen want to try, I am with them, full stop.
I had the good fortune of being generously hosted on a very complete tour of the BTV location, taking time to talk with and meet many of the team members along the way. If you go to Beta.com and look at the team page here you’ll observe the same thing I did. The company is a group of mission driven, young professionals, with seasoned, super-competent aerospace experts sprinkled in, making it an uber apprenticeship model. The obvious technical know-how coupled with youthful positive energy is incredibly potent. The company’s transparency (they let me sit in on one of their 3x week all-hands meetings), can-do mindset, and just plain sense of adventure and fun, is wholly attracting. You can’t help but have great admiration for Kyle Clark’s intentionality in setting this up.
Look, I am no expert on E or VTOL or eVTOL. I don’t even know if eVTOL aircraft as an addressable market is here yet, or is here to stay, or will be at any time soon. And I don’t know if BETA does. But having seen hundreds and hundreds of entrepreneurial companies over the last decades, this I do know: BETA is easily one of the most impressive enterprises I have ever seen (and I am not known to be an easy grader). The sense of culture and strategy oozes out of the pores of every single team member I met. I am betting on their success.