Learn some of the skills of business, without the risk (a review of a new product)

Wouldn't it be valuable if you could learn the keys to business through experience, yet with no risk?

The best way to learn something, I think, is to learn by experience. However, learning by experience usually also comes with some monetary risk....

You can learn many good business skills, though, through experience, without risk, by playing simulation games.

Simulation games are not identical to having the "real" experience, but they are still very good learning experiences. For example, advanced simulations are used very heavily nowadays by the airforce so that fighter pilots can learn advanced maneuvres without any risk to themselves. Simulation games are also used by the army, because of the high risks.

There's no reason, I think, why we shouldn't make the best use of simulation games to learn about business....

Michael Ross has created a very useful simulation game called "Market Forces." This is a game you play with a playing board, small "boxes" of stock, and an account-keeping sheet. It's a great game to learn about how market forces -- like supply and demand -- affect buying and selling prices. You also learn how you can make money in this kind of situation.

I won't reveal the whole game, but I was able to test-play Market Forces. I thought it was a very stimulating game, and challenging particularly with more players. One reason why it is very stimulating and challenging is because there is no randomness whatsoever in this game.

In Market Forces, there are two or more players. The players are all "middle-men" or "middle-women" who buy boxes of stock from a supplier, and then sell them on to a retailer. This is exactly what distributors do.

The challenge comes about when the distributors have identical or near-identical products. Then the forces of competition come into play. This is where playing Market Forces can teach you a lot.

Market Forces puts you into this position, where you are in direct competition with the other players. You learn possible strategies you can use in this kind of competitive situation.

Some of the key things I learned from playing it have to do with the supply and demand curve, which they teach in economics. If you don't know of it, don't worry, it's quite simple.

The supply and demand curve basically says that, when there is more of a supply of a product, the price will go down. That's because the suppliers will compete with each other to drive the price down.

The opposite is also true. When there is less supply of a product -- that is, there is less of that product available, you can generally sell it at a higher price.

And you also a different result for demand. When there is high demand, the price you can sell something at goes up.

When the demand is low, the price you can sell something at also tends to go down.

Market Forces provides a direct experience of these forces at work. There is a changing supply and demand for the boxes of stock, and this changing supply and demand affects the price you can sell them at, when you are in competition with the other distributors.

Here's something else I learned, which is the power of a monopoly. It is possible -- through some good strategy -- to get an effective monopoly on the product in the game. When you have a monopoly on a product which is in demand, you can effectively dictate whatever price you want to sell it at. This principle is really driven home in Market Forces. This is not a trivial lesson.

It is one of the keys to the success to the four richest Americans. Bill Gates, Larry Ellison, Paul Allen, and Warren Buffett.

Let me explain.

Bill Gates and Paul Allen started Microsoft. And how did Microsoft become so huge? One of the reasons was they were smart, and in the end achieved a near-monopoly on computer operating systems. Windows is EVERYWHERE. The only real competitor is the Apple operating system, yet they only get something like one-twentieth of the sales of Microsoft nowadays. Bill Gates and Paul Allen are rich through the power of creating a near-monopoly.

The next one is Larry Ellison, the founder of Oracle. Here's why Oracle is valued so highly on the stock market nowadays. They are trying to follow a Microsoft-like strategy, except for databases instead of computer operating systems. Larry Ellison is also a very rich guy thanks to the power of trying to build an effective monopoly in database technology.

And finally, Warren Buffett is also rich through monopolies, but not by creating one. Instead, Warren Buffett tries to identify effective monopolies in other companies, then he buys stock in those companies. For example companies like Coca Cola, American Express, Gillette -- all these have some near monopoly-like positions. They have dominant positions which are unlikely to be unseated. Warren Buffett made a lot of money also by knowing the power of monopolies.

This is the most important lesson I found in Market Forces. It is one thing to read about it, and yet another thing entirely to experience the true power of having a monopoly.

It is not so easy to create an effective monopoly in real life, but just knowing its power can be very valuable for surviving and also succeeding in business....

So, I thought Market Forces was a great game, which drives home some important lessons through experience without having to risk any money....

Just thought I'd let you all know.

It's a valuable game!

Combine this in real life with Remote Hypnosis techniques, and you could achieve a lot.... :)

By the way, there are three business simulation games which I know of, which I like a lot....

The first one I ever tried was Robert Kiyosaki's "Cashflow 101." It's a great game.... You learn especially about many of the skills you need for successful property investment.

Another one I've played is a computer game called "Capitalism Plus". (It's no longer being made, but you can get it by doing a search for it on this site.) It's a great game too. You become a business tycoon, and try to create an empire. :) However, you learn some good lessons in the process, including how to read and interpret balance sheets and other financial statements....

And Market Forces, where you really get a deep knowledge of supply and demand and the power of near-monopolies.

Three great games, I recommend them all because they all teach you different skills. :)

Dien Rice