⭐️ How to win the metagame (in real life)

To win in games like poker or football at the highest level you need more than just pure skill.

You need to understand which strategies are currently popular and then develop a strategy that takes the strategies of all opponents into account. What worked this season probably won’t work next season because all opponents will adapt their strategies accordingly. You need to be at least one step ahead of the competition.

If you’re doing this, you’re playing the metagame.

But what does playing (and winning) the metagame mean in real-life contexts?

This is not a trivial question since there are no fixed rules or objectives. Games like poker and football are constrained in a way that the real world isn’t.

They’re finite games, whereas Grand Theft Life is infinite.

What playing the metagame means in real life contexts depends on the kind of game you choose to play within this infinite canvas.

For example, a certain type of manager loves to read books by war generals and muse about how to “get inside the opponent’s OODA loop”. They obviously look at the game of business as something akin to a competitive sport.

There are rules (laws), there are opponents (competitors), there are strategies. Hence to win you need to study your competitor’s strategies, anticipate their next moves, and then make sure you’re always one step ahead of them.

If you look at the game of business this way, “playing the metagame” has the exact same meaning as in any other competitive game.

But, you know, I always thought this is silly. To me, business (like all real-world games worth playing) is a cooperative game. You don’t have to take anything away from anyone to create value. If this wasn’t the case we would all still live in caves.

Hence any lessons about playing the metagame in the context of traditional games do not apply.

There is, however, a slightly different interpretation that makes sense.

We could, for example, say thatthe metagame of marketing emerges from the fact that all marketing channels decline in efficiency over time.

Importantly, this does not happen because some evil opponent is actively sabotaging you. Even if there was only one company that used a specific channel, you’d see diminishing returns.

It’s simply a law of (human) nature.

But then, how do you play and win the metagame?

Winning the Metagame

In the real world, you’re not playing directly against some opponents within the confines of a fixed set of rules. So it makes little sense to become obsessed with their strategies.

Instead, you’re playing with thousands of other people in an ever-changing arena that we like to call the market.

With this in mind, here’s how you win the metagame in real life contexts.

First of all, you need to become obsessed with the market. You need to study its history until you’re able to spot patterns and develop an intuition for how it will evolve.

We already talked about one such pattern. New marketing channels and tactics tend to work well until they’re overcrowded and customers become blind to them.

Secondly, you need to develop solid systems that allow you to stay on top of things. Your pattern matching skills are only valuable if you’re able to put them to use before it’s too late. (This is true least if you’re actively doing things and not just teaching.)

A bunch of Google alerts is definitely not sufficient. Instead, you need actively increase your serendipity surface area so that opportunities can find you.

A third important element if you want to win the metagame is a strong focus on first principles and the ability to ignore made-up rules.

Outlier outcomes in any competitive field require an approach that is both contrarian and correct. You can’t operate from the same paradigms as the rest of the herd; you have to generate your own from first principles. You have to think outside the box and the first step for doing that is realizing that the box is completely self-created.

Dead players (cooks) are busy following scripts, while live players (chefs) are able to do things that haven’t been done before.

If you follow the same scripts as everyone else, you’ll at most get average results. Only when you play a different game, the metagame, you have a chance of getting outsized returns.

And the only way to make sure you’re not following some invisible script is to go back to the very basics. Depending on the context this might mean the laws of physics, the laws of human nature, the laws of biology, the laws of chemistry, the (literal) laws of finance, the rules of, say, football, or a combination of them.

Prerequisites

Now in addition to these factors, there are of course prerequisites before you can start playing the metagame at all.

You definitely need to master the boring fundamentals before you can hope to come up with something new and useful.

In physics, for example, this is obvious. People who try to come up with grand unified theories before they even understand the basic laws of thermodynamics are doomed to fail.

Similarly, your chances of coming up with novel and useful marketing strategies are rather slim unless you have a solid grasp of concepts like marketing funnels, buyer’s journeys, or buyer personas.

However, I don’t think you should spend a lot of time studying the fundamentals before you start going after the metagame. There isn’t a straightforward way of doing this anyway since there is no set syllabus for real-world games.

When you study the history and current state of your field in your pursuit of the metagame, the boring fundamentals are simply yet another pattern you’ll internalize.

For example, if you read a bunch of marketing case studies, you’ll inevitably be confronted with concepts like marketing funnels, buyer’s journeys, and buyer personas over and over again.

A second prerequisite is that you need clarity on what game exactly you want to play.

Most importantly, before you understand its ultimate objectives, you won’t be able to differentiate between winning and losing strategies. And until you’re able to do that, you won’t be able to pick up any useful patterns.

For example, some entrepreneurs want to play the startup game, while others are happy to build calm lifestyle businesses, while even others just want to change the world (even if it means they end up bankrupt).

Some VCs want to maximize MoM / IRR and hence only try to do the very best deals, while other firms choose to maximize the amount of capital deployed while keeping the MoM / IRR at an acceptable level.

Similarly, there are lots of subtly different ways of playing the marketing game.

In a Nutshell

To summarize:

The prerequisites for playing the metagame = mastery of the boring fundamentals + clarity on what game exactly you want to play.

The recipe for winning the metagame = expertise + reasoning from first principles + a system for staying on top of things, where you can substitute expertise for pattern matching.

Here’s an example.

If you study the history of marketing, you’ll notice the pattern that certain tactics tend to work on new channels since they’re deeply rooted in human nature.

For example, roundups tend to work spectacularly well on new platforms (that is, of course, until we start seeing diminishing returns). People love being recognized alongside other important people and will happily help you spread the word. This worked in SEO back in the days, just as it now works on Twitter, and will continue to work in the future, although in slightly different forms.

Hence if you notice early (thanks to the system you set up) that a new organic marketing channel becomes available, you can immmediately start brainstorming what a roundup could look like in this context.

This is how you stay ahead of the curve and ultimately win.


PS: I analysed what “playing the metagame” means in real-world contexts by looking at two specific extremal cases. For example, we talked about business as a purely competitive game and as a purely cooperative game.

While this is a valid method to explore the lay of the land, to most people real-world games are both competitive and cooperative. (And, of course, to some it’s all a single player game.)

For example, the speed at which you see diminishing returns in a marketing channel depends on the behavior of everyone else who uses it. Moreover, it’s reasonable to argue that we’re all competing for the same limited amount of attention.

However, the recipe for winning at the metagame generalizes to both extremal cases, everything in between and also works for traditional games.

Written on January 15, 2022

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