On Factorio (& why successful people play games)

November 18, 2020

"It's the one video game that everyone at Shopify can expense”. Tobi Lutke, CEO of Shopify

I owe a lot to gaming. Sure, I met my boyfriend-to-be 10 years ago, but I didn’t fancy him until we were in the pub 7 years later and I saw his eyes light up when I pulled the game ‘Love Letters’ out to pass the time while all the cool kids were smoking.

It was also around 10 years ago I met another group of friends who were very into games. Specifically, strategic gaming; built around designing, constructing and maintaining systems. These guys played games like Catan, Risk, Starcraft, Civilization, Rimworld, and eventually, Factorio - the game the CEO of Shopify feels is so applicable to business, you are allowed to expense it. I’d had consoles growing up and played a lot of video games with my brother for an hour or so a few days a week. This was the first time I had played a) a PC game or b) one that kept me up until the early hours of the morning and had me clocking up 4-5 hour sessions daily.

What these guys, and many successful people in the tech business, have in common is that they enjoy working hard for something, setting their own goals, really getting into the details, and the complexity and challenges of the experience. They aren’t afraid to fail because they realise it makes them improve. They aren’t afraid to share their problems because it makes everyone better. And they aren’t afraid to make strategic bets because, unlike the business world where you might make one bet a year, they’re doing this with every turn of the game. They just love to build, take another turn, and see what happens.

Why Factorio works for business

Factorio is a real-time strategy game about building and maintaining factories. You begin in an alien world, and while initially about survival (manually harvesting supplies and fending off enemies) you soon have enough resources and knowledge to create automated production lines, electric machines, and solar-powered robots.

The heart of almost every management game is its puzzle element. How best to use a finite amount of space and resources, how to get stuff to work as efficiently as possible, and how to link everything together. Layers and layers of networks - symbiotic and each reliant on the other.

I’m not going to post a screenshot of the game because to look at someone else’s huge mechanical creation at peak spaghettification is frankly not going to help my argument. So here is the 2014 trailer instead:

1) Transfer learning

It was during a discussion about ‘Building a Modern Business’ on the Invest Like the Best podcast that Tobi Lutke, CEO of Shopify, spoke about Factorio and the idea of ‘transfer learning’. He makes the point that games work to simulate situations that only come up occasionally in real life. Within that simulated environment, you learn by experiencing the good and bad several times in a condensed period - just like airline pilots use simulation training - and is especially true for a sandbox game where you are free to set your own goals and parameters. Games are also abstractions, so they strip away the complications you have to contend with in real life, enabling you to focus on a specific mechanic unconstrained. Factorio lets you tear apart and rebuild factories repeatedly. Transfer learning through gaming works so well researchers have even used World of Warcraft to study the spread of pandemics.

2) Progressive trial and error

Lutke also applies the same theory to Brazilian football players. Growing up in Brazil, they play Futsal - a ball game similar to 5-a-side football [here is Ronaldinho playing as a kid]. Games and teams are smaller, they play almost anywhere (on much harder surfaces like sand or indoors) and the ball is intended to stay on the ground so it doesn’t bounce. This means more - and varied - interactions with the ball than those who grow up using a full-size grass or turf field. Increased time practising, more diversity, and a focus on foot-work in their youth make for better football players in adulthood. Progressive trial and error is a key, transferable learning you can take from games like Factorio and apply to real life.

3) Sandboxes

Factorio is a sandbox game that targets both skill and imagination as you can set your own goals. Similar to your real-world goals, these will change as you adapt to the game. Just like starting a business, as a new player you will need to explore as much as possible (literally through the map and in terms of the game mechanics) and learn how to use the technologies you have available to you. Once you understand everything, you can then work on how to make things more efficient. And finally, once you have things set up as best you can, you begin to learn how to be reactive to threats.

4) Iteration

The limitations in the game are intended to make it more interesting. By having only a certain amount of space available, designing your production system in the best way possible and managing available production capacity is essential. Building, testing, and when something goes wrong, reassembling the puzzle pieces just like startups iterate a product. 

Problems arise in a similar way to real-world engineering, but you can encounter and dissect them at your own pace. One fault can bring your entire factory to a halt - and with so many layered systems that rely on each other to operate, often the fatal issue is several layers removed. So you have to learn to trace a problem back to its root cause - also known as a ‘systems mindset’.

5) A systems mindset

Usually, when you do something and the outcome is undesired, you simply learn to not do that specific thing again. This is an outcome mindset. With a systems mindset you don’t just look at the outcome. You look at the root cause, all the steps you took, and how they can teach you to avoid other potential mistakes. You don’t just optimise the output - you optimise how you approach the problem. Once you start critical thinking you can troubleshoot to understand the bad results of the unmanaged system (for example, where your inefficiencies and bottlenecks lie) enabling you to make improvements. This is very easy to achieve in a simulated factory environment.

In Sam Carpenter’s book The Systems Mindset the three things he says are vital for business can be applied here:

1. Strategic objectives - the ultimate purpose (defining what is important to you, in this case: building an escape ship)

2. Operating principles - how you make decisions (identifying actions you can take to fulfil your objectives, in this case: does this help me build the ship?)

3. Working procedures - how you do a specific thing (completing the actions, and specifically for Factorio ask: can this task be done better?)

6) Automating

At its core, Factorio is about automation. Automation is pretty much the biggest thing in the digital business right now, accelerated by the pandemic and a shift to remote working and online consumerism. The beginning of the game is akin to Minecraft - acquiring resources (e.g. wood from trees or coal, copper, iron and stone from mining the earth) then crafting by using things like the stone to build a furnace so you can melt the metals to make useful items. Where the game becomes more complex is when you start to research technologies to build tools and machines that will automate tasks for you, accelerate your pace and free up time for creative building, just like a business will always strive to optimise. So drills take over your mining job, conveyor belts take over the transportation of materials, a factory takes over building the conveyors, electricity takes over from coal, trains take over from conveyors, and eventually, computers and robotics take over from you.

7) Programming

Factorio utilises the same cognitive skills that programmers have (like deductive logic and algorithmic thinking). Again, the point of the entire game is to automate with blueprints, which are just Factorio-language for scripts, macros and other tools and utilities to make you more productive. This is why most programmers do not like the game - it just feels like work but without getting paid. But, if you are not a programmer and want to work in digital, it can help you pick up these cognitive skills to understand the work better (especially when you get to creating these blueprints, belt loops, inserters, trains, and entire circuit networks). And the best part is it's a visual programming language so you simply have to look at the system to begin reasoning with it.

8) Quality

Factorio teaches you to be prepared for future growth and scaling. You can create the most insanely huge and complex factory possible and the gameplay continues to be excellent. There is never a slowdown in the simulation - even though many of the elements run on different networks and each has their own logic. Commentators across several forums report never having encountered a bug or had the game break or crash - even as the number of users has increased.

This is completely intentional - it literally says on the Wube Software website (the developer behind Factorio) that the “gameplay is the king”. This quality generates respect and prevents users from abandoning the game. The developers also blog in intricate detail about everything from the basics to the more obscure parts of game development. This has created a loyal and engaged community of players that are happy to share the game in their networks and educate newcomers. As someone who works for a digital product studio, I can’t stress enough how important high-quality code is. Avoiding technical debt in production is key to time and cost-saving. Having a quality product in a highly competitive market is even more important for the retention, referral, and loyalty of users.

9) UX

In addition to quality code - Factorio boasts very well thought out UX too. Sometimes it might not look like the prettiest game, but that is because the makers have - rightly - favoured playability. Things like smart notifications for events, which you can then investigate through the live map view with zoom functionality. The maps are also layered so you can quickly evaluate your transport network, your defences, and even which areas are currently affected by pollution. If you pay attention, you can learn a lot about what makes a good user experience and what aesthetic (or other) sacrifices sometimes have to be made in order to provide the best for your users.

In Factorio, you also receive data in the form of graphs for displaying pollution generation and electricity use. And experience in utilising feedback is essential to a successful business.

10) Politics and war

What we haven’t got to yet is the part about you not being alone on this alien planet. The inhabitants aren’t too thrilled about you pillaging all the natural resources and building a dirty, noisy factory. To defend yourself you need to craft armour, weapons, and eventually walls, turrets and other defences. I’m not saying this is a perfect analogy for the business world, but it is another challenge for you to manage. 

Actions have consequences. At some point in your journey, you will have to make preparations, concessions and agreements that are about other people, not just what will benefit your business. For example, government regulations and sustainability issues.

11) The environment

As I just mentioned, Factorio uses a pollution mechanic that is necessary to fight against. The more pollution your factory churns out, the more attacks you will suffer from the natives. That makes being environmentally friendly a huge part of the game (even though I appreciate forests do get in the way and the wildlife does mainly consist of pests). In the vanilla version of the game, once you have deforested that’s it - and you just have to build a vast amount of solar panels to take over from your coal power plants. But there are mods that let you restore the environment (e.g. plant trees) which also reduces pollution.

Most of us understand the basics of climate change. However, it is an important reality to consider when starting and growing a business and I’m glad it features in the game.

12) Maintenance

After a while, you are just at the maintenance phase of the game and you feel ready to start something new with your learnings. This is basically the startup/venture world in a nutshell.

A good quality you pick up playing strategy and construction games is humility. You quickly realise that you will make mistakes and therefore you learn to always operate under the assumption that what you are doing could be wrong. It is also ok to fail. On the other hand, you learn to appreciate the small victories that can age into insignificance in business. Finding that first small source of iron gives you the same rush as constructing your last robot arm.

13) Focus

I know earlier I said having a sandbox and setting your own parameters was really good. But limitations also teach you things. Thinking about all the options at your fingertips and the different ways there are to do something can be overwhelming. Choice overload is a genuine cognitive impairment in which people struggle with making a decision when faced with many options. A microcosm of this is choosing what movie to watch when you have huge catalogues stretched over Netflix, Amazon, Disney, Sky and others. In a game, your options are limited. So you have to get smart.

You only want to learn or do things that you will be able to exploit enough to make up for the toil involved in learning or doing it. It’s good to become used to being selective about what you research, how you allocate your space, and how you dish out your resources.

14) Mods

Adding mods (modifications) is the gamer version of experimenting or pivots. Some mods are just there to remove some time-consuming or tedious bottlenecks and include: getting you through spaces or forests quicker, auto-repair or fill items, keep a to-do list, and finding out what things are used for and how to use them at a greater distance. 

Other mods are there to add features to the game and include: adding more space to buildings, new items, and the most recommended mod is Rampant Mode. It makes the biters (enemy wildlife) smarter and tougher. They will actively seek out weaknesses in your defences, conduct pre-emptive raids, and the mod activates pheromone trails (used for tracking you and each other).

This is an extended version of the progressive trial and error I mentioned earlier. Pressure-testing yourself, your product, or your business against a more challenging market just makes sense. Removing some of your usual obstacles in an experimental environment can also teach you a lot. Anything to make learning more varied, faster, and smarter.

15) Mental health

Energy restoring activities are things like exercise, sleep, and things you find fun. These are things you engage actively with like hobbies, passions, and….games. Luckily, most human beings are wired to enjoy games. 

Energy traps are things that you do that do not restore energy. These are often passive things like random-access media (especially browsing social media and the internet).

The ideal cycle is restore, focus, restore, focus. So at the moments you are not doing something focused (like work, housework, errands) you want to be doing something that is going to restore the energy you used. Aside from the obvious sleep and exercise, hobbies are the best way to do this - and games have the added benefit of (usually) coming with a sense of accomplishment on the side.

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