Introduction
Last updated
Last updated
This book is about the ways people create, control and compete over large pools of resources.
When people think of pools of resources, they tend to think of money. For example, a hedge, private equity or venture capital fund is the most straightforward type of resource pool: it's a bunch of money that's supposed to grow larger through investment. There's nothing wrong with this model, and there's much that will be said about money pools throughout this book.
Real-world pools tend to be bastions of influence because they contain more than just one resource. Money almost always plays a role here, but it isn't the end-all-be-all. For example, a head of state is in control of perhaps the most potent form of resource pool: a government. Governments have money, but they also have armies, populations of people, land, and so on.
Large corporations likewise have heterogenous pools: Amazon is wealthy, but they also have massive pools of computing power, customer data, merchants, etc. If all they had was money, they'd still be quite powerful, but not at the same level.
Sometimes money and other related resources aren't even the point. Social media personalities may not be anywhere near as wealthy as the owners of the platforms they work on, but the sheer number of people who listen to them represents a resource pool that can be leveraged. A revolutionary movement may not have much money, but it uses ideology to boost perceptions of itself and leverages pools of people and action potential to get its way.
At an everyday scale, we tend to measure the value of one another through what kinds of resources we've managed to pool together. Houses, cars, businesses, attractive partners—the more we have, the more perceived value we tend to have. There's much that can (and should) be discussed about whether those things are important on a philosophical level, but for our purposes that represents a basic fact of human social and economic life.
Even a neighborhood street gang can be considered a resource pool. It's an accumulation of money, guns and physical labor power. Much of what the gang does is create and shape perceptions around how ferocious, rich, etc. they are. Although this isn't my focus by a long shot, it's possible to use the Valuation Games framework to see such a model through a new perspective.
We're all programmed to understand that power pools where resources do, an idea that acts as a common thread throughout everything in this book. So how does one create, control and defend a valuable resource pool?
If you don't have any resources, you need to find a way to be valuable—or, more realistically, appear valuable. If you have control over a pool already, you need to defend your current value through consolidation, expansion and careful screening of collaborators. Both types of people need to convey value for themselves and their assets, often while simultaneously downplaying the value of the assets of other parties.
I came up with the concept of Valuation Games to describe this complex dance. Valuation Games represent the strategic interplay of perception and influence used in the competition for acquiring and maintaining control over diverse pools of valuable resources. In other words, if you want to control resource pools, you need to manipulate perceptions.
I think of this through the lens of games—not because it's somehow trivial, but because it allows you to see that there are players, strategies and win/lose conditions worth considering.
With that in mind, what follows is a synthesis of two core ideas:
The game's primary win condition is control over large pools of resources. These pools may belong to the person who controls them, but that is not a necessary condition.
Gaining control of those pools is often a matter of manipulating valuations, of both people and assets.
There are two types of players within this game who have distinct strategic imperatives:
Players without resource pools (Contenders), who aim to create their own pool or gain control of an existing pool.
Players with resource pools (Commanders), whose primary goal is to simultaneously expand (or at least maintain) their pool while protecting it from other players.
There is a constant strategic tension between these two groups of people. Each side has different incentive structures and strategies they utilize, creating openings for all kinds of interesting strategic interactions.
What motivates each type of player to do what they do? Where are there both opportunities to move up and dangers that threaten to destroy? What are the rules? Are there any rules? These are the questions that are answered through the Valuation Games framework.
This book is specifically tailored for those who currently hold positions of authority over significant resource pools. Whether you are a corporate executive, a political leader, a hedge fund manager, or an individual investor, Valuation Games gives you a new set of mental models to see your decision-making processes through.
It addresses the complexities of safeguarding your assets against competitive threats and navigating the intricate dynamics of power and influence. You will learn not just how to maintain your current holdings, but how to strategically grow and diversify them, ensuring long-term stability and influence.
On the other hand, if you're an ambitious Contender, Valuation Games sheds light on the paths to influence and the tactical maneuvers necessary for victory in competitive environments. This book provides a roadmap for understanding the landscape of resource control, identifying opportunities, and skillfully positioning yourself to capitalize on them. The odds are stacked against Contenders, but it is possible to win if you're smart, lucky and well-versed in Valuation Games.
