Lots of games are in play at the moment.
It’s funny how so many teams make the same mistakes as others have been making over the last decade. Here are some of the biggest mistakes that teams make.
#1 Overbidding on Celebrities.
This is what happens when you give people free money with no obvious consequences in an auction. Since there’s no restriction placed on what teams can bid, all it takes is one team to bid highly and many other teams will start to follow in the year after, and that’s without any bidding war!!! Two or more teams bidding against each other will often cause one of them to bid the max. What they don’t see, at least not right away, are the consequences for overbidding. Congratulations! You just won a celebrity AND LAST PLACE WITH HUGE LOSSES! Pat yourself on the back. You just proved to everyone watching that you’re an idiot and a fool.
#2 Not Doing Anything
Lots of students are lazy. They don’t plan to do any work if they don’t have to, particularly at the start of a semester. This is soon reflected in many BSG games. Usually there’s at least one team that entirely missed the deadline for decisions, saves decisions with no changes, or basically changes one or two insignificant values without really trying anything. They think they are being “conservative.” No, that’s just being lazy. Why is it not conservative? Because the company that they have been given to run has made several important mistakes in the past that could be corrected in the first year you make decisions, so when you fail to do so, it’s because you have no clue about the state of your own company and haven’t taken the time to understand it at all. It’s easy to tell which teams these are. They are the ones in Year 11 that still have a dividend around $10,000 ($10M) and long-term debt of $67,100 ($67.1M). They probably don’t even know that they have inherited loans that should be refinanced, and they don’t know what dividends are, nor why they shouldn’t be paying out a lot of dividends when they should be reinvesting that cash in their own growth. Small-cap growth companies don’t pay dividends and aren’t expected to pay them. A good way to tell whether a company is managed by fools is when they pay out dividends with no good reason to do so.
#3 Doing All the Wrong Things
If you start this game by making a lot of decisions based on your preconceived notions on what’s good or bad for business, you’re gonna have a very bad time in this game. This happens when students declare that they are going to be the “low price leader”, the “best quality producer”, the “best value seller”, or any other equally ridiculous declaration when they HAVEN”T EVEN BOTHERED TO LEARN HOW THE GAME ACTUALLY WORKS. Nobody cares about your opinion besides you. You probably have an overestimated opinion of yourself. Anyone who first learns how the game works before declaring how they intend to play will have a much greater chance to destroy you in competition during the first year and every year thereafter. FIRST, LEARN THE GAME. Then your opinions have a better chance of being relevant, accurate, and useful. Until then, you’re just another student with a wild-assed guess who thinks his/her opinion matters merely because they think so and said something. No, you’re probably wrong, particularly when you have no valid reason to know whether your opinion is good or bad.
#4 Doing Some of the Right Things at the Wrong Times (usually the worst times).
There are millions of combinations of decisions that could be very good at one point in the game in the right situation, but these exact same decisions can be a disaster when done at the wrong time or in the wrong situation. For example, customers do like to have many models of shoe to choose from in order to get ones that they like and that fit them. If a company increases the number of models produced and sold to 500, then consumer demand will increase substantially, revenues will increase dramatically, and market share will increase dramatically. That all sounds great, right? What you’re missing is that you will lose a lot of money on every shoe you try to sell if you try to make 500 models in the first year. Anybody can sell $20 bills for $10, until they run out of money doing it. That’s a great deal for the buyers. It’s a terrible deal for the seller, and it’s a recipe for guaranteed bankruptcy the more you sell and the longer you do it. At a different time in the game, after you have invested in upgrades and expansion, you may very well be able to produce 500 models of shoes very profitably. So making and selling lots of models can be a good thing at the right time, or a disaster at the wrong time.
#5 Doing Some of the Right Things While Doing Too Many of the Wrong Things.
This is probably the most common mistake that teams make. They make a lot of different changes all at the same time without really knowing what they’re doing with any of them. Basically, this is the WAG method – the wild-assed guess method of making changes just to “see what happens”. This is basically about as effective as letting a monkey pound on a typewriter and hoping that something will come out that can be turned into a best selling novel with some editing. The problem is that the results will usually be bad, but you made so many changes that you are equally clueless after the results as you were before you submitted the decisions.