Startups are games. This newsletter is about empowering brains (with game theory 🧮), hearts (with community & wins 🫶), and your network (with new big-brain founder & investor friends through games 👾).
Today’s play: we spun out our first simulation - an incumbent versus 2 startups. Only 1 winner… 👀
Hi guys, Remy here! 👋🏼
There are two types of founders in this world:
Those who win 🥳🏆
… and those who lose. 😢💔
Good news: winning at startup is not an art, it’s a science.
Startups are games. Games have clear mathematical structures & clear winning principles.
If you follow these, you will win at this game consistently.
This newsletter is about distilling these principles.
🏆 Weekly reminder: The Highest ROI Minute 💎
We want this community to be one of the highest-ROI systems in your life.
We want you to carve out 1 minute to GTO per week.
We want this minute to be the highest-ROI minute of your week.
What do you get from it?
⚡ Accelerated as hell - intros to new hires, funding, etc
💛 Appreciated & loved - you’re celebrated
🔥 Hyped and energized - you’re part of something big
That one minute might 100x your trajectory.
🧮 Massive flaw in your decision-making
What distinguishes winning founders from losing ones
1. A Situation You’ve VERY Likely Been In 🎲
You’re a founder building a startup. Assume you’re very early.
Key question: You’re in a big space, but you’re competing against 1 big incumbent as well as 1 other startup. How do I win? 🤔
Like in maths, we start by working the simple n=1 case, where a lot of structural magic unfolds. Once done, we add another dimension of complexity and unfold the essence of that added level, and so on and so forth.
2. What Most Founders Do (level 1) 👨💻
We’re going to analyse a regime of actions that the dominating majority of founders operate in, which we call constant strategies.
We define constant strategies as actions where a constant unit of time returns a constant output. Furthermore, if no time is spent on any of those actions, then no output is generated.
Examples of constant actions:
Spending X hours doing cold outreach
Spending X hours interviewing users
Spending X hours reaching out to investors to do the fundraising
Spending X hours writing social media posts.
In this edition, we’re going to answer the above key question restricted to constant actions only. Our guiding question then becomes:
Level 1 question: What happens when all players play constant strategies? How to win?
Who wins after 2 years?
Which startup sells more?
What’s the best way for a startup to win?
Pause now & take 30 seconds to think. What do you think happens in this simulation? Reply to this email with your guesses for 1, 2, and 3 — I’m genuinely curious. 🤔
3. Unfolding Results from the Simulation 🧠
We model three players in this simulation (one big incumbent and two startups) all playing constant strategies:
A. The slow incumbent (25% product, 75% acquisition):
Capital-rich, process-heavy, optimized for distribution, with established channels and a large installed base; product change rate is steady but moderate.
B. The balanced PMF seeker (50% product, 50% acquisition):
Captures teams pushing toward parity on product while steadily testing channels
C. The all-in product startup (70% product, 30% acquisition):
Models a startup racing to close the product gap against the incumbent, still keeping a minimal acquisition drumbeat; this stresses whether superior product velocity plus modest distribution can tip share before runway decay.
The full maths & framework of the simulation can be found there. If you want to be involved with the codebase and help us write some code & run simulations, reply to this email.
i) Who wins after 2-5 years? Any changes in the long term?
It’s no surprise. The incumbent is just dominating & super far ahead. Whatever the time horizon you give to the simulation, startups get crushed.
You might change any parameters, even 100x the funding and the burn rate (all in product here), you still get dominance from the incumbent.
On the other side, you might think the all-in product company is off to a promising start, originally, but then starts losing its customers as the incumbent’s acquisition becomes more and more superior: customers of “all in product” start hearing more about the incumbent, and make the switch because the incumbent’s product is superior.
ii) Which startup sells more?
Surprisingly, the “all-in product startup” (player C), which focused more on the product, gets more customers.
At the start, they’re a bit behind the “balanced PMF startup” (player B) as they reach out to more folks, but after some time, clients from player B move to C. Before that, player B is ahead.
Player B wins customers who didn’t have a solution initially, but later loses them to both A and C.
Player C loses customers to A but wins customers from B
iv) What if we get a startup to play 99% product - 1% strategy? Is there any constant strategy a startup can do to win?
No. No matter which acquisition/product split you do, it doesn’t change. They still get crushed.
The amount of raw resources that the incumbent can spend on product, even though they have a productivity handicap, is an order of magnitude greater than what any startup can produce.
No matter what, you get crushed by incumbents.
v) What happens if the market is completely untapped, with the incumbent having captured only <1% of it, with the remaining 99% being unclaimed?
You still lose.
More market unclaimed gets you to close more customers over time (which gets you to survive longer), but ultimately, you die.
There is hope at the start because you’re talking to ignorant customers who haven’t heard about the incumbent’s solution, but ultimately, both startups lose.
4. Critical Takeaway 🧠
People might not be sensitized to this, but it’s obvious…
Constant actions are garbage.
Unless you are in a space where there are no incumbents and no other solution to the problem you’re solving, you’ll never win at startups playing like that.
Really. Ban as many constant actions from your days; you’re hijacking yourself.
Clearly, no amount of realistic funding in the world would get you to win or remotely compete if you keep playing only with these constant-return strategies.
Ok, I see... But what do I do to win then? 🤷🏼♂️
Great question! 👏👏 The awareness of the “constant” regime and avoiding these actions is half of the answer. The other half is understanding the other non-constant regimes, and pragmatically, what they mean on a day-to-day basis.
For now, just focus on the return you get on your time. Instead of spending units of your time to get a fixed return, focus on building up systems in your product, acquisition, and brand that periodically produce product improvement or generate new leads, even when you’re not working.
What we’ll see is that some of these systems can be added to any company, while others are intrinsically tied to some specific business models. We’ll also see that some are better to have in an early-stage, while others are critical for the growth stage.
That’s it for today. We just opened a massive treasure chest here, with a bunch of other treasure chests within it.
👾 Your Move Now
If what we’re doing resonates with you, please share it with your smart startup friends. The more we are, the stronger we become, the more value you’ll get.
If you win, we win. If we win, you win!
Game on,
Remy 👾