006 The Loser's Game
Plus: The Chainsmokers have a what?
My memory fails me most of the time.
The reason could be lifestyle choices in my youth, lifestyle choices currently, or the increasingly fleeting hits of dopamine all around us.
Just as people can be pre-diabetic, I believe some (if not most) of us are already pre-ADHD.
Some of the popular symptoms of ADHD include:
Memory lapses
Cognitive fog
Difficulty paying attention to details
Difficulty following instructions
Tendency to lose focus or get sidetracked
So for the next part, I want you to pay attention, and stay focussed as I believe it to be a very interesting mental model which originated in the investing world but has also transferred seamlessly elsewhere.
It broadly states that there are always two types of competitive games: "Winner's Games" where success comes through skill, and "Loser's Games" where success comes from avoiding mistakes.
Understanding the Loser's Game
In a Loser's Game*, the outcome is primarily determined by the mistakes made by the players rather than their skill level. A research showed that in professional tennis, about 80% of points are won through exceptional shots, while in amateur tennis, 80% of points are lost due to unforced errors. This suggests that amateur players can win by simply avoiding mistakes, allowing their opponents to defeat themselves
*The author is Charles Ellis - an investment consultant.
Key Characteristics of Loser’s Game
Mistake Avoidance: Success in a Loser's Game hinges on avoiding errors rather than making brilliant plays. This principle can be applied across various fields, including investing, sports, and even personal decision-making.
Simplicity Over Complexity: Many individuals are drawn to complex strategies that may sound impressive but often lead to mistakes. The Loser's Game encourages a focus on fundamental principles and consistent performance, which typically yields better long-term results.
Strategic Play: Knowing which type of game you are playing is crucial. In a Loser's Game, a conservative approach that emphasizes error reduction is more effective than aggressive strategies aimed at outplaying opponents.
Key Takeaway
The key idea is that success often comes not from trying to outperform others through skill, but by avoiding costly mistakes.
TIL The Chainsmokers have a VC fund
The musicians have been dabbling in start-up funding since 2020 when they launched their early-stage venture firm, Mantis. They already have some big name backers including Mark Cuban, and their firm focusses on finding and funding a wide range of startups that could potentially benefit the young demographic much like their audience.
They currently have AUM of $57 million.