Do Pass Go: Business Lessons From Monopoly The game we all grew up playing actually provides great advice for entrepreneurs trying to figure out the startup world.
Opinions expressed by Entrepreneur contributors are their own.
With my kids now in elementary school, I find myself back playing the same board games I grew up playing. Surprisingly, a lot of the game's strategy can be implemented in the startup world.
Here are a few lessons entrepreneurs can learn from the game of Monopoly.
Passing GO (the faster the better). The more times you pass GO in Monopoly, the faster you can collect $200 to reinvest into your game. So high rolls and speed are clearly in your advantage.
That is no different in entrepreneurship. The faster you are moving, the bigger distance you are building on your competitors, gaining customers and market share before they do.
Related: Triple Word Score! What Scrabble Can Teach You About Business.
Boardwalk empire (go big or go home). While many Monopoly players may shy away from investing $400 in the Boardwalk property -- the most expensive property in the game -- they are being short sighted. If you think about your long-term investment on that property, you will earn a competitor-crippling $2,000 in rent every time another player lands on that spot (after you have built a hotel at that location). Putting a ton of cash into your hands to reinvest into the game, while draining your competitors' cash coffers at the same time makes it difficult for anyone to survive that onslaught.
Don't under invest in your startups and always put on your long-term lenses.
Location, Location, Location (build barriers to entry). When I play Monopoly I have a few strategies. I land grab to attain first mover advantages, buying up everything I can afford. I also try to bias properties in the same color family (e.g,. all the red properties) to start developing the properties before my competitors start developing their properties. Lastly, I try to build up long stretches of sequential investment (e.g., all the neighboring red and all the yellow properties) that would make it near impossible for a competitor to not land on my properties and pay me rent.
Startups should focus on the same approach: look for first mover advantages, keep a lead and look for ways to cripple competitors with competitive barriers to entry.
Develop properties (but not faster than you can afford). Without contradicting the "faster is better" section above, you don't want to build up your properties and go bankrupt because you can't afford fees, rents and other hurdles in the game. You want to always be at a safe level, with the ability to fend off competitors. If I see a bunch of competitor "land mines" in my immediate future (e.g., high odds I land on their properties to owe them rent), I want to make sure I have enough cash resources to pay those rents, allowing me to stay in the game without having to sell or mortgage my other properties.
Same with startups -- you don't want to build your business too quickly that the wheels end up coming off the bus. Making an investments too quickly can end up hurting you, if you can't drive a near-term ROI.
Related: Turning Passion Into Profits: From Playing Games to Playing for Profit
The railroads (focus on uncapped investment returns with no distractions). The railroad properties in Monopoly have a capped payout (at $200 in rent if you own all four railroads) compared to New York Avenue (the same $200 initial cost), yet this orange property has a $1,000 rent if developed with a hotel.
As an entrepreneur, if the same investment in two different opportunities can yield materially different returns, focus on the higher return option. Also stay focused on your core competencies in your business, and don't stray into areas where you have limited expertise.
Take a chance (manage risk and reward). Building a startup is pretty much taking a chance, where the higher risks you take, the higher your potential rewards will be. But, like in the game of Monopoly, you never really know what is going to happen until it happens. So while you may be hoping for an "Advance to GO" card to collect a much needed $200, you may get dealt a "Go Directly To Jail" card. Make smart bets and hope for the best.
Community Chest. (It's all about the ecosystem). In Monopoly, the Community Chest cards could have you engaging with the local opera house, stock broker, bank, hospital, doctor, city repairmen and beauty pageant. Guess what? Building a startup is no different/ You are building a business that is part of an ecosystem with other entrepreneurs, investors, mentors and service providers. You are not in this battle by yourself. Tap into your local ecosystem for help.
Don't go to jail (play within the rules). You will never be successful if your hands are cuffed, sitting on the sidelines. Build your business ethically, and never cut any corner that could end up back firing in your face.
Related: How Brain Training Games Can Help You Build Your Business