Monday, January 14, 2008

The Art of Warcraft: Business Strategy Lessons from Warcraft 3

My first strategy game, a long long time ago, was Dune - the game that made Westwood (now part of EA) famous, the franchise that was the foundation for the seminal Command and Conquer series.

I have to confess, though, that ever since Warcraft 3, I haven't really gotten into another strategy game (if you have suggestions, I'd love to hear them), even though I've dabbled with several, including the latest Command and Conquer (Tiberium Wars).

Over the years, it's struck me that strategy games are an excellent analogy for business. So I sat down to pen the list of business lessons I've learned playing Warcraft 3.


1. It's all about resources: Ultimately, the player who can gather resources quicker and spend them more effectively will win. It's a law of nature. Effective resource utilization beats luck every single time.

2. But it's also all about how you spend your resources: Plan how you spend your resources, but don't hoard. When you save, save up enough to build something new. I've lost more than one game where I've gathered resources at a prodigious pace because I forgot to spend them. If I ever lose a game with more than 500 gold, I know I've lost because I didn't spend my resources wisely. That's also part of why a small, nimble company can beat a goliath - because they spend their resources effectively.

3. Pay attention to all your resources: Resources are complementary. Gathering too much of one and too little of another is a common mistake because your true resource level is how much you can effectively spend. In the case of Warcraft, if you have tons of gold but no lumber to spend on an upgrade or unit, you might as well not have the gold. In business, if you have great products but don't have the marketing resources to publicize them, you won't win (and conversely, all the marketing in the world won't sell a bad product).

4. Expand quickly, but remember that you're most vulnerable when you're expanding: Getting an expansion early in the game can be a key strategic advantage. But if your opponent kills your expansion, you stand to lose a lot. Expanding is an advantage, but it divides your attention. As you expand, it becomes even more important to keep tabs on your opponents so that you can counter their attacks early and prevent them from striking a devastating blow.

5. Sometimes it's all about speed: In some cases, if you can find your opponents quickly and prepare your army well, you can kill them before they ever become a real threat. There's a reason why some players specialize in the rush - it works if you know how to do it. Sometimes winning in a market is all about outflanking your opponents early, when they're vulnerable. This is particularly true if you know they'll be formidable opponents later in the game.

6. It's all about information: If you can find your opponent quickly, you can often win the game by making guerilla attacks when he's most vulnerable. If you can keep constant tabs on your opponents, you can find out exactly what they're doing and counter everything they think of throwing at you. Use every information source wisely.

7. Sometimes you just need to control the center: Seek out key resources and control them. In Warcraft, this could be the health fountain in the middle of a map . In business, this could be a key market, channel etc.

8. If you're in it for the long run, upgrade constantly: If you can't go for the quick win, you'd better be upgrading your units (products/services) as soon as you can. Upgrade their attack (build new features), armor (nullify competitive advantages), and build complementary units that increase their effectiveness (partner well and get a good ecosystem going). Innovation is a powerful competitive advantage - in a free market, a lack of innovation is a death knell. Don't skimp on R&D - ever. Just make sure that your R&D has focus and that you're spending your R&D dollars on the most important things.

9. One powerful unit never wins the game: (at least not against a good opponent). No matter how powerful a unit, there's usually a cheap way to defeat it if you're prepared. Don't spend all your money on the big units - they can die fast if they don't have the right backup. Don't put all your eggs in one basket - remember to complement your main strategy with all the support you can bring to bear.

10. Build and protect your unique advantages at all costs: I've rarely won a game without a powerful hero or two. Identify your key competitive advantages early. Build them up so that they complement each other, so that the whole is more than the sum of the parts. Sometimes, this can make all the difference in the world. Protect those advantages well, too. No matter how small a threat may seem, defend your competitive advantages aggressively. In Warcraft, you upgrade your hero by winning small battles, against opponents or against neutral armies, and the more you upgrade your hero, the more likely you are to win. In business, the more unassailable you make your competitive advantage, the less likely you are to face a serious challenge.

11. Sometimes your biggest advantages are also your biggest weakness: In Warcraft, some units can give you a huge advantage, e.g. the mages, sorceresses, etc., but they're inherently weak and vulnerable to attacks. A smart opponent knows to target these units first. So make sure you have adequate backup and defense to keep your opponents at bay so that you can use your advantages to their fullest rather than lose them quickly.

12. Sometimes you lose, and that's a good thing: Even the best-planned strategy can go awry, and sometimes it really does come down to luck. That's when it's time to cut your losses and move on. Save that replay. Figure out what the turning point in the game was. Learn how you could have spotted that during the game and how you could have averted your loss. You may lose one game, but you'll win several more because you're a wiser strategist.

13. It's never just one game: You've just lost a game that you invested an hour in. Several times you felt like you were on the verge of winning - but you lost. There's always another game. Move on.

14. Build a home court advantage and use it:  If you have no defenses at your base in a long game, you're asking for trouble. The best way to defeat an opponent is to lure them to your base and use your defenses in concert with your units while you decimate their army. If you can force a competitor to play in a market where you define the rules, you're almost guarantee that you'll win the battle. And once you've weakened them sufficiently, you might just win the war too. Conversely, if your opponent has the home court advantage, it's a bad idea to fight them there. Lure them away, then attack them.

15. Attack when your opponent is weakest: I've won innumerable games of Warcraft by knowing when an opponent is attacking a powerful NPC and attacking them from behind. It's hard to win when you're fighting on multiple fronts. Know what your competition is up to, know when they're weakest, and use this information to secure a competitive advantage.

16. It always helps to have a Plan B: Sometimes you can do everything right and still get surprised. It helps to have a Plan B.

Any other business/life lessons you've learned playing strategy games? I'd love to hear about them.

(Update: I guess I'm not the only one who thinks Warcraft is an excellent way to learn to think strategically)

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