Got My Butt Kicked

[applemachine]

I played a pretty rough game that ended a few minutes ago. Perhaps I can share some thoughts and talk about what I learned.

I decided to enter the watch market because nobody else was in an position to research the tech. I wasn't a watch expert but the only other AI that was focused on retail so I thought it was the safest way to attain a monopoly. I was leading in revenue and profit but eventually the retail AI decided to diversify and slowly take over my tech.

Rather than go into the long story allow me to bullet some highlights:

- I decided to hire a COO with apparel expertise, along with 100 in manufacturing and skill in retail and research. (cost a fortune!!)
- I dominated many apparel markets until AI slowly crept in and priced goods dirt cheap
- Bought out the AI responsible for cutting into my profits, forcing me to dilute my shares in the process.
- Bought out the AI doing the same for my watch business. Required huge loans at 3 mill interest per month.

Tech Problems:
I didn't realize how difficult it was to hold a tech lead when you are not an expert. Protecting my monopoly in watches was a hellish experience. I probably won't enter a market I'm not an expert in at the start of the game ever again. It took a long time to reach 100 and then it was very difficult to maintain with the 10% drop each year.

Economy Problems:
The economy in this game was terrible. There was nearly zero growth throughout so I had a tough time predicting when a good time to invest in a new factory or retail store. Each time I did I'd end up under utilizing while demand continually dropped. I played the market hoping to protect my money from inflation. I lost about 100 mil total doing this. Still up to the point when I lost, I had the highest revenue and profit compared to all other AI in the game. I was well on my way to dominating either through buyouts or simply taking advantage of open markets with no AI competition.

Stabbed in the Back!!
Now we come to why I lost. The lovely COO that I hired early in the game to enter the apparel market was making almost 70 Mil per year after 17 years of service. Her pay started at around 55 or 60 so through her career she probably earned close to $1 Billion. I didn't notice what she was doing because I was so worried about entering new markets, keeping up my tech lead against my competitors, and generally trying to stay profitable. I took a few minutes to take an inventory of my company in order to find places to trim and become more profitable. Turned out she purchased 45% of the company and had a cash reserve of $300 mil! Figuring she was a loyal employee I dismissed it as a problem. 2 minutes later I was getting my butt kicked out the door.

No, I'm not disappointing. I was a little shocked to see that this was possible. I learned a lot and had a lot of fun. I look forward to my next hostile takeover.

The moral of the story is this:
1. Tech is vitally important, but you have to put a lot of thought into how much you want to invest and where to invest.
2. Profit margins are important. Don't become a giant company bloated with costs. Trim where you can.
3. COO's are expensive and will purchase your company with their earnings.

[Esoteric Rogue]

I played a pretty rough game that ended a few minutes ago.

Cool.

I imagine that watches could be a tough entry, because their necessity indexes are only 30, 20, and 10. Nobody's buying silver watches during a recession. It may be the wrong basket to have all your eggs in.

Research expertise is usually moot for COO, because that's what the CTO is for.

Tech 100 is only a starting point. Within a firm R&D units synergize with each other. I'm simply saying it's most efficient to have all 9 units per firm researching the same thing. Indeed, according to the Cap 2 manual, you get a 480% bonus [EDIT: that is, 480% efficiency, only 380% bonus] with 9 units linked to each other, and personally I always use 3-year terms. A personal R&D weakness was that I didn't realize how expensive training was.

Nice buyouts.

Yeah, it's cute when you look at the Billionaires 100 and say "Hey, I know that guy! ... (muttering)". http://www.youtube.com/v/uf5rIuJPTt0&st ... autoplay=1

Always have to maintain 50.01%.

Nice story, thanks for sharing!

[applemachine]

heh, I didn't even pay any attention to the necessity index. That's probably why the falling economy had such a devastating effect on my company.

I wanted to hire a CTO and a CMO but I was afraid of their costs would it have been worth it to hire those 2? I was using my COO for everything. Was that a mistake?

[Esoteric Rogue]

I wanted to hire a CTO and a CMO but I was afraid of their costs would it have been worth it to hire those 2? I was using my COO for everything. Was that a mistake?

Sure, it could be an oversight. The COO costs a lot more than the other 2; I usually hire the other 2 first. But they're all very demanding about raises.

[WilliamMGary]

hmmm..

[The below is my experience and play as documented in my business journal: http://capitalismfans.com/businessjourn ... /WMGP.html]

1. Your executives will always buy shares in your company, not to take you over just because they like feeling they're part of the enterprise. Always maintain the majority of the shares unless your company is so expensive no one person or company can acquire 75%.
2. R&D I've switched to 2 year term and the majority of my R&D facilities are 3 unit per product and I have 4 R&D facilities that dedicate themselves to one product.
a) 3 years was took long to wait for new products when my competitors were constantly obtaining/researching products.
b) By the time my product quality is dropping due to technology the new technology is coming out.
c) R&D is expensive which is why I use 3 units. The 4 innovation centers I use to help me catch up when the AI won't sell me needed technology.
3. I've recently hired a COO but only to operate my smaller markets and it seems to work out very well. It reduces his impact on revenue and profits after his salary because those markets are not that profitable....there more for a market-share play and to prevent a monopoly from occurring.
4. I have way more staff then the AI and i'm constantly looking for ways to cut expenses but its not easy to identify what is actually needed and whats not. I think it depends on how your company is setup to operate.
5. I think acquisitions and integration of the mergers is the best way to grow. Organic growth is possible but it will definitely take longer. Mergers seem to pay for themselves, after a few years if you merge with the correct company.

Sounds like a lot of fun, will only make you better.

[Esoteric Rogue]

Ah, I just posted a business journal for Muscovian Leatherworks, and had to take an R&D screenshot.



All I have to do is wait three years to improve my tech level from a stinky 9 to 188, even with no skill! 9 connecting units are the bomb! EDIT: I WAS WRONG

[WilliamMGary]

Ah, I just posted a business journal for Muscovian Leatherworks, and had to take an R&D screenshot.



All I have to do is wait three years to improve my tech level from a stinky 9 to 188, even with no skill! 9 connecting units are the bomb!

To your bottom line.

[Esoteric Rogue]

$6 million times 3 years is a small price to pay!

[applemachine]

As long as the opportunity cost is low. If other short term investments are not worth the potential gains after 3 years. At the start of my game I would target 1 year research projects because I forgot to factor tech decreases and competition. Actually I didn't understand why the AI would research all the way to 400+ until I realized it negatively effects your competitors quality and prevents them from ever catching up to you in tech.

A big mistake I made was allowing my costs to completely erode my profits. I was making the most revenue and profit but it wasn't enough to begin buying back stock and securing my company from buyout. I figured the economy would rebound and I could finally start utilizing the tech, training, and research I was spending all of my money on. I think I spending about 9 Mil/mo on research.

Another mistake may have been spending time researching the intermediates like linen and textiles. The cost of keeping up the research on those products doesn't seem to pay off in the end. To maintain a constant level of 100 tech you have to keep at least 3 research squares running indefinitely. I had an entire research building working on maintaining top tech in intermediate products. I kept those products open for all to purchase but they ended up being purchased by competitors who used them to make better end products. Then they would lower their prices to steal away all of my market share. I had to keep my COO at 'normal' pricing to prevent a price war leaving me with much lower profits.

I think the real challenge is in figuring out what to do when an AI turns out to be competing directly with you, shortly after you've invested heavily in a particular product or industry. The problem is that you have to fight to maintain a lower level of profitability than would otherwise be available for you if you were alone. You can be sure there is an AI selling products freely. I suppose that's just how the cookie crumbles eh?

[WilliamMGary]

As long as the opportunity cost is low. If other short term investments are not worth the potential gains after 3 years. At the start of my game I would target 1 year research projects because I forgot to factor tech decreases and competition. Actually I didn't understand why the AI would research all the way to 400+ until I realized it negatively effects your competitors quality and prevents them from ever catching up to you in tech.

Ah! I didn't realize this but it does seem to be the case.

A big mistake I made was allowing my costs to completely erode my profits. I was making the most revenue and profit but it wasn't enough to begin buying back stock and securing my company from buyout. I figured the economy would rebound and I could finally start utilizing the tech, training, and research I was spending all of my money on. I think I spending about 9 Mil/mo on research.

I try to manage my business as if a recession is right around the corner....sometimes I go too far. A lot of my factories are not meeting demand but its an asset when a recession comes...you never know how long the economy is going to be bad so if you can't make a profit in a recession then you have some operational issues and better find out what they are quickly.

Another mistake may have been spending time researching the intermediates like linen and textiles. The cost of keeping up the research on those products doesn't seem to pay off in the end. To maintain a constant level of 100 tech you have to keep at least 3 research squares running indefinitely. I had an entire research building working on maintaining top tech in intermediate products. I kept those products open for all to purchase but they ended up being purchased by competitors who used them to make better end products. Then they would lower their prices to steal away all of my market share. I had to keep my COO at 'normal' pricing to prevent a price war leaving me with much lower profits.

COOs needs to be kept on a short leash and constant oversight unless they're in areas that are not meaningful (small markets, stores that almost never turn a profit etc). I like researching the intermediates but at the start of a game you may want to focus on one product and not try and research the intermediates for all the raw materials though I do think it gives you an advantage in product quality....you could also (if there's demand) wholesale those intermediates to the AI.

I think the real challenge is in figuring out what to do when an AI turns out to be competing directly with you, shortly after you've invested heavily in a particular product or industry. The problem is that you have to fight to maintain a lower level of profitability than would otherwise be available for you if you were alone. You can be sure there is an AI selling products freely. I suppose that's just how the cookie crumbles eh?

I think the AI identifies where you're making money and then enters it. Never try to compete with them on price. I always just set an overall value I'm willing to accept and if I only take 25% of the market as long as its profitable I just move to another market that they're not in. Eventually they do exit the business especially there's strong recession. If the market can support it open up more retail outlets, sometimes there's unmet demand that they're taking advantage of with cut throat pricing.