Gamification: Teach Your Children To Be An Entrepreneur Via Monopoly
As noted in How The Woman Behind The Monopoly Game Lost Out On The Billions It Generated, the board game was initially conceived by Ms. Elizabeth J. Magie, circa 1903. Her motivation was to create a game that would illustrate the evils of capitalism. Per her worldview, capitalism was a zero-sum game in which a handful of people prevail, at the expense of the rest of society.
It is estimated that more than 250 million Monopoly games have been sold and that the game has been played by billions people in over 100 countries. Ironically, rather than encouraging socialism, Monopoly has taught millions of young entrepreneurs valuable business skills.
Gamification Before It Was Cool
When you play Monopoly with your children, subtly underscore an entrepreneurial mindset in their gameplay, as described below.
Note: Given the huge number of people who have played the game, I will assume that most readers are familiar with its basic rules. If you’re unfamiliar with the game, here is a quick overview.
Lady Luck – Just like in the real world, luck plays a significant role in the outcome of Monopoly, as two dice dictate each player’s movements around the board. Luck intervenes with the first roll of the dice, which determines the order of play. The players who roll early in the first round of play have a higher probability of landing on a property that they can purchase.
When starting a company, luck plays a bigger role than many successful entrepreneurs care to admit, and a smaller role than unsuccessful entrepreneurs like to claim. The First Mover Advantage in Monopoly is real, but just like in business, its long-term value is nominal.
Some people play Monopoly the same fatalistic way they live their lives. They roll the dice, move their piece around the board and passively live with the consequences. In contrast, encourage a proactive, entrepreneurial mentality in your child by demonstrating that they do not have to be satisfied with their luck. Show them that they can increase their odds of success by forming alliances, taking calculated risks and negotiating mutually advantageous deals, as discussed below.
Negotiating With A Smile – Monopoly is inherently a social game, which requires your child to establish a rapport with the other players in order to become a successful dealmaker. Often, the best deals are those in which an alliance is formed with another player, to the detriment of the other players.
For instance, you might sell a property to a player that grants them a monopoly, with the proviso that you pay no rent on any of the properties that comprise the newly formed monopoly. Such a deal ensures that your opponents will pay a higher price whenever they land on any of these properties, while you simultaneously increase your cash position by selling the lynchpin property at a premium.
Your child can also create a monopoly by trading properties, with both parties involved in the trade immune from paying future rent on the resulting monopolies. Although it is a violation of Monopoly’s official rules, another creative way to form an alliance is to grant a loan to a fellow player to allow them to purchase a monopoly, upon which you would not be obliged to pay rent.
Even though the game is hypercompetitive by design, your child will likely play with the same basic group of family and friends. As such, they will eventually learn that a one-sided deal cut in one game will impact their ability to negotiate fair deals future games. Explain to your child that entrepreneurs benefit in the long run by establishing fair agreements based on mutual gain, rather than crafting one-sided deals that result in short-term, unilateral gains.
Not Winner Take All – Played in its traditional form, there was only one winner in Monopoly. As stated in its official rules, each player’s goal is to, “become the wealthiest player through buying, renting and selling property.” Ms. Magie engineered this outcome to demonstrate the wickedness of forcing the losing players into bankruptcy. However, there are alternatives to conveying this harsh view of business to your offspring.
For instance, Monopoly Jr., recommended for ages five to eight, determines the winner by the person who has the most money once the first player runs out of money. If you are an especially good parent, you will be sure to run out of money before your children.
With older children, you can place a time limit on the game and then determine first, second, third place, (etc.) winners based on the amount of wealth created by each player. This conveys the healthy message that business success is not binary – companies can thrive without driving their competitors into bankruptcy.
Vigilance – You cannot take your eyes off the board when playing Monopoly, as you risk a player landing on one of your properties without paying the appropriate rent. This same dogged attention is required in any venture. You must focus on constantly delivering value to your customers and ensure that you are paid for the value you deliver.
Cash Flow – Successful entrepreneurs know that effectively managing their cash is one of their primary responsibilities, especially during a venture’s early phases. Monopoly is an excellent training ground to develop rudimentary cash management skills. It also exposes young capitalists to a number of other financial concepts, including: mortgaging properties, paying taxes and interest, dealing with unforeseen expenditures, participating in philanthropy, etc. When the appropriate Chance or Community Chest card is played, you can have a brief discussion with your children regarding each such issue.
For younger players, counting money and calculating the appropriate change are valuable skills. Let your children be the game’s banker and be patient while they hone their cash management skills.
Role Of Government – Ms. Magie’s original game included a number of board spaces that levied taxes on bread, coal, and wealth. The luxury tax has survived in the modern version of the game, as well as various fees players must pay when landing on the Chance and Community Chest spaces. Such aspects of the game allow you to explain the balance between government intervention and the responsibility of each citizen to contribute to a society’s communal wellbeing.
Location Matters – In a very real-world sense, the location of your properties is critically important. Some properties have higher rents and some have an increased probability of opponents landing on them. In addition, there are several Chance cards that direct a player to advance to a particular property, as well as cards that require a player to “Go Back Three Spaces”. Each of these factors impact the probability that certain properties will be visited more than others. Use the game board to explain that not all properties are created equal and the role probabilities play in an entrepreneur’s success.
Tenacity, Persistence & Endurance – One of the most important lessons to be derived from Monopoly is that in business, the spoils often go to those who remain “in the game” the longest. A typical Monopoly session takes hours to complete, and in many instances it becomes a battle of wills to see which players have the stamina required to play the game to its conclusion. With younger children, instead of ending the game when they become restless, simply put it aside and resume playing when they are refreshed and can properly focus.
Passing Go – With a few exceptions, every time a player passes the “Go” space, they are given $200 by the bank. Even the Junior version of Monopoly has this feature, as players receive $2 each time they pass “Go.” These funds often sustain a player and allow them to remain in the game when they would otherwise go bankrupt. Explain to your emerging entrepreneurs the startup corollaries of passing Go, such as subscription business models that allow you to collect annuities from your customers.
You can further explain to older children that recurring revenue provides startups with greater predictability, which eases their cash management responsibilities. Such annuity revenue allows a venture to stand on the shoulders of each prior month’s proceeds and thus grow its overall revenue in a stable and linear fashion.
Jail – Entrepreneurs have social and legal contracts with their customers, employees, investors and other stakeholders. If these contracts are broken, the entrepreneur can face legal consequences. The Monopoly Jail space serves as a reminder to aspiring entrepreneurs that spirited competition is encouraged, as long as it is kept within the acceptable bounds of fair play.
The Real Winner Is Everyone
By encouraging your child to play Monopoly with an entrepreneur’s mindset, they will internalize a number of life skills which will serve them well, irrespective of their ultimate career path. But most importantly, your entire family will benefit from lifelong memories of shared laughter and togetherness. Time for a game night?
You can follow John on Twitter: @johngreathouse.
I am a serial entrepreneur and investor turned Professor of Practice at UC Santa Barbara. I led Computer Motion’s $110 million IPO and the $236 million sale of Expertcity