Do you Play to Win or to Not Lose?

I find strategy concepts that I would typically use in the business realm are often surprisingly useful when moved to determine a strategy for one’s life and vice versa.

One idea, in particular, I’ve been thinking about over the years is developing a strategy to “win” as opposed to one designed to avoid loss. The two approaches are quite different.

About 10 years ago when I was in industry, I ran the ecommerce product line for a company called ATG (now owned by Oracle). ATG built enterprise software to run ecommerce websites. My old clients included J Crew, Martha Stewart, P&G, Neiman Marcus and the like.

At the time (and continuing to today), if you were going to build a website to handle up to $1 billion in sales online, you really only had two options. You could buy from IBM or you could buy from ATG.

It was my job to figure out how the heck we would compete against IBM. Corporate buyers are deathly afraid of screwing up, making a mistake and getting fired. It was not easy to compete against IBM, even though we had a far superior product.

The #1 obstacle we faced was a corporate buyer who in the back of his mind remembered IBM’s advertising campaign from the 1970s that ran on national TV that said, “Nobody ever got fired for buying IBM.” Even though that campaign was decades old and had never been run since, these buyers were still thinking about it.

We were 99.9% smaller in revenue than IBM, we had far less brand recognition and we had a bunch of buyers afraid of losing their jobs by buying from the wrong vendor.

Here’s what I would say to prospective clients (and would train our sales team to do the same):

"Mr. Customer, it is true that nobody ever got fired for buying IBM. But you know what? Nobody ever got promoted for buying IBM either."

At the time, our best clients were literally appearing on magazine covers featuring the groundbreaking work they were doing in ecommerce. Because our product was much more flexible and mature that IBM’s, these clients could use our product to execute their unique ecommerce vision. This was simply not possible with IBM’s product at the time.

So, I came up with (what I would now call) a cognitive reframe to be more concerned about not getting promoted than getting fired. In the end, IBM and ATG split the market. We got the innovators who wanted to pursue differentiated strategies online. IBM got the conservatives who didn't care to be differentiated but simply wanted a solution that wouldn’t result in them getting fired.

The underlying dynamic at play is this: What’s your goal? Is your goal to play to win? Or is it to play to not lose?

The two approaches are fundamentally quite different.

The big discrepancy between these two approaches comes from the willingness and ability to tolerate uncertainty and failures.

In the "play to not lose" approach, all failure is to be avoided even if that means diluting a positive outcome. In a "play to win" approach, failure is tolerated (and often necessary) in order to maximize the positive outcome.

I see many big companies play to not lose. I see many startups (especially in Silicon Valley) focused on playing to win.

This is quite ironic in many ways. The big companies that factually have more assets on hand (to weather any kind of short-term loss) avoid any kind of loss. Conversely, it’s the startup that has no resources that really can’t afford to lose that’s willing to risk it all to play to win.

I find that terribly ironic in so many ways.

I see a similar dynamic when it comes to strategic career planning. The person with multiple Ivy League degrees is surprisingly risk-averse, even though she has factually the most assets to offset any potential loss. Meanwhile, it’s the high school drop-out that really doesn’t have any assets on hand to offset a loss that is willing to take risks.

I’ve been thinking about this fascinating dynamic for quite some time and have a theory as to why it exists.

It’s my hypothesis that it has to do with the structured education system that Ivy League grads successfully navigated to achieve their academic success.

In academic environments (I’m thinking mainly high school and undergrad here), there is a largely 1:1 relationship between hard work, reducing failures, and achieving success.

In other words, if you do your homework and study hard, you will make fewer mistakes and you will get high test scores. This logical relationship is so well ingrained we might as well call it the Hard Work = Good Grades theorem of academic success.

The powers that be designed the grading system to reinforce the theorem above. However, it is not a universal law applicable to all areas of life (though many erroneously assume that’s the case). It only applies to academic environments because those environments were deliberately designed that way.

However, as one leaves the academic world, most continue to operate by that theorem. If I work hard, I will reduce my mistakes and I will be more successful in my career and life.

What they don't realize is that in the “real” world, the underlying grading system is not the same as in school. (It may be true with certain employers, such as McKinsey, that replicate the academic system, but it is absolutely not universally true.)

For example, in school, there is only one performance metric to be optimized — grades. In life, you can choose from an infinite number of variables to optimize. You could optimize for money, power, prestige, or you could optimize for health, peace, joy or literally anything else.

In school, you are assigned a single master “grading” system. In life, you get to choose the “grading” system you’ll use to measure the progress of your life.

Stated differently, school environment favors those who are good at following the rules.

The real world favors both those who follow a presumed set of rules and those who write their own rules.

Those are very different skill sets.

In corporate strategic planning, one of the concepts often discussed is the idea of “changing the rules of the game.” If the market competes on price, and your company will never have the lowest price (because your cost structure is too high), you can change the rules of the game such that design or product quality becomes the dominant competitive attribute.

(This is basically what Steve Jobs at Apple did. He didn’t try to create cheaper versions of his competitors' products. He created new categories of products that were substantially more expensive than the alternatives. In short, Jobs didn’t follow the rules of the industry, he opted to rewrite the rules instead.)

One of the challenges I see with professionals in their 20s (and frankly all the way up to their 40s and 50s) is that they’ve assumed that the old academic theorem of "work hard, reduce mistakes, and get more success" holds true outside of the academic environment.

It may still be true, but they fail to realize that out in the real world, there’s more than one way to be right (and more than one “grading” system to use to measure the progress of your life).

In classic strategic planning circles, if your assets are not suited to winning the game (of the industry) based on how the rules are written, the right strategic move is to rewrite the rules of the game to favor the type of assets you do have.

If you are brilliant creatively, it is strategically a bad idea to keep seeking jobs where creativity is an irrelevant skill. If you’re bad at math, don’t go applying for jobs that require strong math skills.

I see similar strategic concepts used in military strategy. I’ve been a beginning student in studying special forces strategy. How do you take a numerically inferior fighting force and defeat a numerically superior fighting force?

Well, what I’ve learned is this: You definitely do not structure the fight to be one where size of force is the dominant determinant of success.

If you’re the special forces strategist, you attack in the middle of the night when 95% of the opponent's force is asleep and unarmed. You use surprise or deception to catch the opposing force off guard — usually attacking their weakest area. Then you use speed to accomplish your objective in the small window of time where you have a temporary advantage.

Then you get the hell out of there before the opposing force has had time to wake up, get armed, get oriented, and get coordinated. In military strategy, when you can’t win with the normal set of rules for how military engagements are fought, you change the rules.

The same applies in business strategy and in career strategy too. This strategic principle is transferable across domains.

Getting back to the idea of playing to win vs. to not lose, once you get out of the academic environment, there are multiple ways to succeed, not just one. There are also multiple definitions of success to choose from, not just one.

Often the path to “winning” in the real world cannot always be defined in advance. There are uncertainties and insights that can only be discovered in the middle of the journey.

In contrast, the path to avoid losing often is more predictable and certain.

Whether you play to win or to avoid losing in the “game” of life is a personal choice and a matter of your personal values. If you play to avoid losing, that path is generally fairly predictable and knowable in advance. If the most likely outcome of a “not losing” scenario is quite attractive to you, you should focus on that.

If you play to win, that path isn’t always predictable in advance — accept that as a trait of this particular path. If the "playing not to lose" outcome is not sufficient for you, then aim higher (with whatever definition of winning you choose to use).

What is not okay (or at least sub-optimal in my opinion) is when someone says they want to play to win, but display through their actions that they’re actually playing to avoid losing.

You can’t end up at a destination in the East by driving your car towards the West.

The key is to figure out what you want and get comfortable with the path that leads to what you want. If you’re not willing to take the path, then consider changing what you want to match what you are willing (or not willing) to do.

The strategic goal is your choice. Getting your strategic goal aligned with the actions you plan to take to achieve the goal is not a choice, it’s a requirement.

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21 comments… add one
  • Winston WEE Apr 9, 2014, 9:45 pm

    Another insightful piece, Victor, thank you.

    It rings true in my home country of Singapore, where the focus on academic achievement and the low unemployment rate discourage aspiring entrepreneurs to step out and take risks.

    It is also true that many of the present local business leaders who created wealth in their own time were not high achievers in school and therein had a lower opportunity cost in choosing an entrepreneurial venture.

    I now work with an education institution while providing startup advisory and services on my own time, helping startup tap on some of the generous government grants for startups here in Singapore. I remain hopeful that this new generation of youngsters will be an even more adventurous and entrepreneurial group than the last.

    Once again, thank you for your ever-insightful writing and I look forward to more!

  • VV Apr 9, 2014, 6:08 pm

    Hi Victor,

    Great article again ! and a good follow up to your earlier article on the Emergent Career strategy.

    I wanted to ask you though – Even though “More Risk – More Reward” makes sense at a logical level .. it is very difficult to persevere through the uncertainty and failure and the sacrifices at a personal and an emotional level … and it sure as hell requires guts and self belief to make it through when everything around you is seemingly falling apart

    Are there any practical devices you have used to keep your self belief levels high … The fact that you have achieved success earlier with Stanford and McKinsey might really help at a subconscious level … But are there any exercises for people who are just starting out (beginning with small wins etc.)?

    Another question I had is “risking it all for the sake of risking” .. The fallacy that you will ultimately succeed if you keep taking risks … which is also incorrect … At what point do you start taking calculated risks and raising your bets ?

  • William Gan Apr 9, 2014, 6:00 pm


    Great article – As a soon-to-be Ivy League graduate myself though, I wanted to add a twist/nuance to your loss aversion hypothesis in case it was missed and not just purposefully left out. Your hypothesis is Ivy League graduates are particularly loss-averse because they are trained to avoid mistakes. My addition to this is: Ivy League graduates are particularly loss-averse not only because they are trained to avoid mistakes but also because their potential loss from a mistake is significantly higher.

    The distinction is important from a behavioral economics standpoint, where the “anchor point” (an expected baseline) plays a big role. An Ivy League graduate probably has a $60k+ job as an expected baseline, compared to an average high school graduate’s ~$30k salary expected job baseline. To a person starting up a business, 30k probably seems a much easier baseline to break even with!

    Coupled with the psychological fact that losses are weighted up to 2x as heavily as gains (see prospect theory), the pattern of Ivy League graduates making loss averse decisions makes a lot of sense. Whether this is desirable or not is of course a different question – one to which I think everyone will have a different opinion.

    Fantastic article though – I always find your logic structure easy to follow and the anecdotes interesting.

  • Raj Subramanyam Apr 9, 2014, 12:51 pm

    Dear Victor,
    What a great topic this is. I call it a promotional vs preventative mindset. In my blog post titled “Assigning tasks appropriately”, I wrote about a parent’s mindset (nurturing, promotional) vs. a babysitter’s (preventative, ensure nothing untoward happens) as it relates to caring for the child. This concept can be applied in business, career and sport. I believe this is one key aspect of understanding oneself and also others (for recruitment, delegation of task, etc.). I find it interesting to extend this to sport. The captain that seeks victory is prepared to lose a game and hates drawing games (no result – this is possible in cricket). But the captain that fears failure will never risk going all out for a win and hence has lesser number of victories and greater draws. I wish I could get an expert psychologist’s view on why this is so and what factors contribute to the dominance of one kind of mindset. Then we can put together some steps to methodically transform from one mindset to another.
    Thanks for all your writings. I wish you’d write more often.
    Raj Subramanyam

  • Larisa Rosenblum Apr 9, 2014, 12:26 pm

    Hi, Victor. I am in the corporate innovation world and also work with a lot of start-ups – my role is unique in that when we deliver a client project, part of the value-add we bring is a knowledge of (and legitimate working relationships with) the entrepreneur community, which lends more credibility to the innovation work we do. I would just like to say that a lot of the start-ups we work with are either founded and/or led by top Ivy League graduates. In fact, people who graduate from Stanford, Harvard, and other top tier schools generally have a higher rate of successfully launching a start-up compared to those who have not had a higher education degree. While I agree with you that it takes an understanding of the general market rules as well as the mindset of bringing your own rules to the game, your article makes it seem as though people who come from a traditional education system where achievement is valued first and foremost do not compete on equal footing with your typical high school drop out when it comes to ‘winning the game’. Yes, Bill Games, Steve Jobbs, Eminem, and others are all examples of the one in many that have truly broken stereotypes and excelled in building successful lucrative enterprises around themselves, but this does not and should not by any means imply that successful start-up cultures and entrepreneurs should be run by those who have not had a high level of education from a highly regarded educational institution such as top tier university. As a graduate of New York University, I value the discipline, quality of education, peer-to-peer knowledge transfer, networking, and all of the other quality elements my degree has brought. I am, however, an entrepreneur and venture capitalist by nature and this is what enables me to leverage all of those wonderful elements to my advantage in driving my clients to achieve commercial impact and breakthrough growth amidst ‘business as usual’ – and in spite of the fact that many of these corporations surely do, as you say, play not to lose. Completely with you on that point – which is why they need folks like you and me to help them see the value and strategy in playing to win!

    • Victor Cheng Apr 9, 2014, 11:32 pm

      Half my mentors and friends are ivy grads. The other half high school drop outs. I’ve been trying to reconcile this observation for the last 10 years.

      The one commonality across all is they are all very smart and extremely well educated – though not necessarily well schooled.

      I agree with you on the value of an education, but make a distinction between well educated and well schooled.

      I know many people who are well schooled who are not well educated in my opinion. The converse is true as well.


  • Alex Apr 9, 2014, 12:08 pm

    Most people don’t know what is “win” for them. They just can not answer “What I do want” in concrete terms, they can not understand. Those who can – they win.

    • Victor Cheng Apr 9, 2014, 11:28 pm


      Yes, yes, yes!

      First step in a strategic plan is to define the goal.

      The rest is pointless if the goal is unclear.

      For life strategic plans, I often ask people to define their goal. Then I ask them to define the goal of their goal – sometimes drilling down multiple times.

      For example if the goal is to get into consulting. That’s not really a life goal, that’s a means to an end. What is the goal of having consulting as the goal? Is it status? Prestige? To learn? To become an entrepreneur? To segue into private equity?

      What’s that goal of that goal? And that goal?

      Most people never get past the first layer…. And quite often they don’t drill down past the first layer because there is no second layer.

      It’s very hard to win in life if you haven’t defined what winning is.


  • Dee Jean Apr 9, 2014, 11:57 am

    Awesome Read!

    You hit it right on the head! If I may add, people that “play to win” find comfort in situations where they stratigize in areas of high risk and high reward. Ironically these scenarios are often in arenas of low success rates, is highly inefficient, random, and usually where the odds aren’t necessarily gaurenteed or locked—yet these folks find themselves at home in this chaos. They practice and strategize to be the “tallest midget” on the court. It doesn’t matter that the risk of failure is high because they believe and act on the fact that they can be less inefficient (or more successful) than most in that arena and just being that brings you into elite status where extraordinary $$$$ is made for being elite. You are thinking and acting Extra Ordinary after all!

    Athletes are perfect examples of it. The hall of fame baseball player fails to connect with a bat 70% of the time. The “play to win player” is only trying to fail at a rate of 69%. In his mind—that’s attainable because it can’t be that hard to be less effiecient by 1%. That drives the bball, baseball, golfer or tennis player. I believe that also drives the steve jobs, day trader and music artist that’s out there. It’s a paradigm shift in thinking that makes it so powerful. The fact is that that 70% failure rate for a batter is based on a batter hitting the ball with a certain technique MOST of the time. The game changers, ironically,—–consciously, mistankely, and/or instinctively bat differently. Which opens the door to NEW ODDS!

    Dare to think different. It’s the audasity of hope!

    AGAIN… GREAT READ AND THANKS FOR SHARING! Please send more — it helps me/us to see things differently which ultimately changes our odds!


  • Todd Apr 9, 2014, 10:50 am

    Hi Victor,
    Great article… once again.

    Is trying to get into consulting after 7 interviews and no offers a “Play to Win or to Not Lose” situation?

    I have a PhD in engineering from a top school, and I thought that the best “business” training method, in order to succeeded later in my career, was to spend 2-3 years in management consulting .

    After being dinged everywhere, I’m considering spending 1 year in a business development job or product management in industry, and then try again with consulting.

    I always considered going to do post-doc and continue in academia as the safe path, the “Play Not to Lose”, while consulting was the risky path, the Play to Win . But now I’m wondering if this consulting has become a fixation.

    My strategic goal is not fully formed (too many years in school I guess!) so aligning my actions to goal becomes more challenging.


    • Victor Cheng Apr 9, 2014, 11:25 pm


      In order to make a brutally honest and realistic assessment on your consulting efforts, you have to ask were you 110% prepared? Were you performing at your personal best and it wasn’t good enough or were there things you could have improved upon?

      Some people can’t get to the level needed to pass regardless of effort. They hit the ceiling of their personal abilities and it falls short of the bar needed to get in. In those cases, it makes sense to take the feedback and focus elsewhere. Consulting does not = winning. It is simply a means to an ends. Winning = having the life you want. There are always multiple ways to get there. Don’t get fixated on the specific approach. Fixate on the goal (or the goal of your goal) and be flexible in how you get there.

      Also if you got dinged in late rounds, generally speaking it means your inherent ability is within the range where improvement through practice can result in an offer. If you got dinged across the board in first round and you were extremely well prepared, it may mean it’s not a good fit. If you got dinged in first round and you were not well prepared, the conclusion is inconclusive… Too hard to tell.

      Good luck,


  • Natasha Che Apr 9, 2014, 10:04 am

    OMG! Victor, according to me, this is one of the best posts you’ve ever written! I have three bachelor degrees, a master, and a PhD. And I hated school for 20+ years because the system was so not my style. But I didn’t realize it until much later… I totally agree with everything you said. And you said it so well! Keep up the good work!

    • Aida Apr 9, 2014, 9:20 pm

      How on earth you managed to obtain 5 degrees. I’m still struggling in getting a master’s degree. Hat’s off to you.

  • Peter Apr 9, 2014, 9:21 am

    I’d say playing to win vs. lose is much more grey than black and white as you state above. In my opinion, it’s like playing in a poker tournament or playing cornerback in American football. You have to maximize your risk/reward. To you use a football analogy, if a defensive player goes for the interception (play to win) and misses, then he gives up a touchdown… Very risky. The key here is the situational awareness, which is much harder to teach.

    • Victor Cheng Apr 9, 2014, 11:20 pm


      If the context is not a game, but a lifespan do you still feel it’s shades of grey? It feels binary to me, either you strive to have a great life or you strive to avoid a terrible life. I know people in both camps, I’m trying to think of someone I know in the middle and am having a hard time thinking of a name.


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