Category Archives: Blog Central

Magic Deck as a Business

As you may recall I play Magic. Today I am going to describe life and business as a Magic deck. Now stick with me while I draw this picture, there are certainly more connections than might appear at first glance.

In Magic there are different formats of building a deck or playing the game. The facet I am going to look at today is called Constructed, which oddly enough is that you build (or construct) a deck before playing. In Constructed you build a deck of a minimum of 60 cards and you generally can’t have more than 4 of any specific card. Sometimes it makes sense to have fewer copies if it isn’t something you want to draw early or is something that you can search out. But the cards that are integral to the operation of the deck you want as many as possible. If there are cards that have similar function but with different names you want to max them out too so that you can have more chances to draw that effect. The more copies of an effect you have in your deck the more opportunity you have to draw it, and if it is a requirement for the deck to be successful the higher chances to draw mean you will draw it early and that will also increase the consistency of the deck. I think consistency is probably the most important aspect of having duplicate cards. If your deck is not consistent, then you won’t be winning very many games. So that is all good you say, but what does that have to do with business?

Excellent question! Well to have a successful Magic deck there must be consistency in the deck. I think that is key to business as well. To have success in business your business must do things consistently. Not just anything, but the right things. However if you are doing something profitable, even if it is not the most efficient thing and you do it consistently your business will make money. Obviously if you are doing things to enhance the efficiency then the consistently will bring up the profits.

They key to consistency in Real Estate investing are things like making sure your lead funnel is full, making sure the marketing goes out, making sure the deals close when they are supposed to. The key players that you need for consistency are your acquisition manager, your title/closing attorney, your bird dogs and wholesalers, your contractors and make-ready team. These people make up your core team and combined with the consistent action are where the majority of the money is made in this business.

In Magic I mentioned earlier that you might have less than 4 of a card in your deck. These things are generally big effects that when they go off you typically win the game. So the multiple copies of cards are to build the foundation to get to this game ending effect, and typically you have a way to find it in your deck as one of the foundational items. You are going to have these one-offs in business as well. These will be your estate planner, your insurance agent, your 1031 specialist. When you need them you search them out and use them for the specific task at hand.

In Magic and in business you need to have the building blocks for consistent action, then find the special resources needed to accomplish a specific task. You also have to track what actions are working (as I have mentioned previously about weight as well) and then decide if another action in business or effect in Magic is more efficient then you need to not be scared to change the process or change the deck. Both in Marketing and in Magic testing is in the vernacular. Always test and decide what is most efficient for the task at hand. Let me know here or on twitter what you think of this comparison or other games that you think can be a corollary to business and investing.

Until next time,
Feel the pain and do it anyway.

Economics – Video Game Style

Today I am going to talk about a couple of video games. If that makes you want to check out now, that is fine, though I am going to tie this into how you can be more successful in your non-gaming life. Still with me? Fantastic!

The two games I am going to talk about are both role playing games. Role playing games (or RPGs) are typically games in which you take on the role of a character and then embark through the world doing quests and helping people. One of the things that typically sets this games apart from things like action games or shooting games is that your characters have stats that can improve over time and more importantly there are crafting abilities where your character can make something. The two games I am going to focus on are World of Warcraft and Skyrim.

Many times in World of Warcraft (or WoW) you will see something like this pop up in the chat window: Leather worker LFW or LF Alchemist. In the first case the character is a leather worker and probably has high level or rare patterns and is willing to use that pattern to make something for someone. In the second, the requester is looking for an alchemist to make them a potion. While both are providing a service that someone else lacks, I see the leatherworker more as a service provider and the alchemist as a goods dealer. I have spoken about those before in this post.

The main reason I see a difference here is the end result of what each player makes. In the case of the leatherworker, they are typically making armor and it is something that the purchaser is going to keep for a while. It is not consumable. So while there is no recurring revenue from it, and most customers will not be repeat, I see it as a service primarily because it is not consumable. Also due to the difficulty in obtaining those patterns, the price can be fairly significant.

Alchemy on the other hand in that game makes potions. Potions are very much consumable and while someone will buy a single piece or armor, they will buy 20 or more potions every night. I see this as a goods dealer because many times there are several potions that give similar benefit, the potions are easier to obtain and make, and the cost is significantly lower.

The economy in Wow is similar to that of real life in that not everyone can do everything. The professions I mentioned above are only two of the dozen or so jobs in WoW. Any of those professions has the possiblity to make a ton of money in the game, through some hard work and persistence. Hmm, where does that sound familar from?

Skyrim –
Next I want to talk about Skyrim. While WoW is a multiplayer game, Skyrim is a single player game. And yet there is still and economy in the game and it can be mastered quite simply. Again there are crafting abilities, but the player can choose to take all of the abilities and be able to make anything. So where is the opportunity in making money? That would be selling to the computer controlled vendors. The trick is to find what is valuable to the vendors and then selling it to them. That should ring bells too.

In Skyrim each of the vendors has between 500 and 1000 gold usually. And it is possible to sell them items and deplete their stores of gold. Fortunately the gold (and everything else in the shop) respawns after about 2 days of game time. So the trick to mastering the Skyrim economy is to sell and take all the gold from this vendor, then travel to a different town and do the same thing, then travel to a different town and do the same thing, etc. It is not difficult, but it does take some effort from the player to accomplish this.

Real World –
I hope digging into those games didn’t dissuade too many of you. My point in digging into those is that the game designers modeled their economies after real economic basis and foundations. In both the models of scarcity are present. And in providing enough value to someone else that they will pay you. To make money in any economy, real or fictional, one must be willing to put in some work, and put that work in consistently. Making money in reality is just as easy as making money in the game. So why do so many people (including myself for a long time) have such trouble making money in real life when they can show that they are economic masters in video games? That is a tough question and I don’t have the answer to that. Is it because they perceive that there is less risk in a game? Because it is easier to put the hustle in when using a controller than it is to get off the couch and put in some hustle? I think putting in some hustle can be as simple as sending out some post cards and answering the phone. We have made tens of thousands of dollars doing just that. Never even have to leave the house. And yet still most people won’t do that.

The premises are the same in economics. Find a point of pain and fix that pain. And make it repeatable. Do that and you will have all the fortunes you wish to have.

Until next time, take some action. Feel the fear and do it anyway.