Digital Dominion

Virtual experiences that taught me how to motivate, how to persuade, how (not) to be an asshole, how to incentivize, how to optimize, and gave me lessons I will use for the rest of my life.

Figuring out the path to (virtual) money — 2012

The following describes a video game I played from age 11 to 14, not real life.

When I was about eleven or twelve, I discovered a certain multiplayer game that I grew to love over the course of a few years. I won’t name the game itself because the content is universal, but I’ll describe what the game is all about.

The world is persistent, meaning it stays on 24/7. Every player starts out with a few dollars, and can pick a job to do (police officer, weapons dealer, robber, store owner, and so on). The general premise is similar to “cops and robbers”, but it’s a lot more dynamic and advanced. Each job would pay a salary, and sometimes would provide additional discretionary income.

For example, weapons dealers would make additional money from marking up the prices of their goods. Police officers could make more money by confiscating illicit goods. Some jobs were better than others in a way that doesn’t reflect the real world.

However, the best way to make money was something called a “money printer”, or a counterfeiting machine. Each player could buy a predetermined amount of these printers per session, and they would disappear a few minutes after the player logged off. Every few minutes, you could collect in-game currency from each, after it was done “printing”.

From here on out, I’ll refer to these as a “printer”.

They cost a good amount of money, so you had to stay on to collect, but when you did the rewards were much better than the other methods available.

It’s one of the only games I’ve truly immersed myself and strategized about, and I think that’s because it’s a game that maps closest to real life situations with people. The game isn’t really about the mechanics, it’s about the interactions with other players and what you make out of that.

Limitations and frustrations — 2012

I quickly figured out that money printing was the best way to accumulate wealth in the game, and I was fixed on it from then on. I could calculate how long it would take to get my principal back after buying each counterfeiting machine, but I still ran into some frustrations. The limitations in the game weren’t based on my ability to pay for more, or my ability to automate my operation, they were limited by the source code.

I had to figure out something better.

Dealing with a flawed operation — 2013

By this point, I knew who regularly played the game and interacted with them. There were a few groups of people who pooled together to buy printers, but there was no extra gain on a personal level. In other words, each person bought their own printers and collected — there was no advantage from banding together other than better defenses from external threats.

What I was particularly interested in was figuring out if how I could make this relationship better than 1:1, or scale my own ownership of the output, although I certainly could not have articulated it that way at the time.

I talked a few people into buying printers that I would front the money for, plus a small amount extra. In their case, they didn’t really care about collecting, they just wanted the small markup and to go about their day.

But I quickly ran into another problem. I mentioned before that if the person logs off, the game makes the printers disappear. If someone took the money, bought the printers, and left — I was out of luck.

Creating better incentives — 2013

I tried something new. Instead of paying the person a small markup at the risk of them leaving, I would change the incentive model to pay out over time.

Of course, the payouts would have to be higher and include some percentage of the collections I took from their printers. But still, I thought they might stay online longer if I did this, and I was right.

I was on to something.

Raking in the big bucks — 2013

Initially, I would roughly calculate what each machine would net over time, when I would reach breakeven, and what percentage of the payout I could give to each person. But this became unwieldy because more and more people started taking up this arrangement.

At least everyone had the same payout model, because I could now afford to max out the purchase of printers for each person. With this many running at the same time, the money quickly became so big that I could afford to pay out seemingly ridiculous amounts per hour to each person.

In the game, much like real life, $50K was a large amount of money, but I could afford to pay this to multiple people on an hourly basis. Everyone thought I was just being generous, and figured I was probably giving them a high percentage of the cut (I wasn’t).

Launching a coup — 2014

Fast forward some time, this setup became boring. It needed to scale more, and in order to do that I needed to formalize the operation somehow. That meant people who were more dedicated and willing to do this consistently.

In the game, there had been a new feature released a few months earlier — a faction system. Basically, you could start a faction, invite your friends, and use it as a shared bank account. You could also control who had access to the bank and who didn’t. Some people could withdraw, but some only had the permission to deposit.

Well… here’s where 13 year-old me gets a little bit evil. Various factions had already been created, and I was somehow able to join the one with the most money. I had been around for a while, and was generally trusted.

At a certain point, I was trusted enough that the owner of the faction gave me withdrawal permissions for the shared bank account. The shared bank had about $250M in it, which was basically the most money anyone had ever made in the game. I could not be trusted.

I stole all of the money and immediately created a new faction, bringing along a few members of the previous one with me. Suddenly, I was the richest person in the game! I already had about $50M in my personal bank beforehand, but this solidified me in the #1 spot. And I really pissed off a few people doing it (understandably so)!

Remember, I’m talking about a video game I played when I was 13…

Running trials — 2014

After the dust had settled, I devised a plan to grow. First, I knew that I had to regain the loyalty of the inner members that I had brought along with me. Just placating them with money wouldn’t be enough, I would have to ensure that they felt like they had power and responsibility (or as much as you can have in a video game).

One of the first things I did was allocate a rank system. The core members were immediately promoted to second or third in commands (I forgot what I called these, but I had a name for them).

Most other factions just let new recruits in on day one, but I wanted to try something different. I would run new prospects through a “trial” to determine if they were worthy of joining (ha!). I did this as somewhat of a joke at first, but I was stunned to see how effective it was at adding some sort of mystique to joining the faction.

If they had to jump through some hoops to get in, they felt more special, and more loyal to the group. I had just discovered a human behavior that also exists in the real world, and acts as somewhat of a virtuous cycle. The more they have to do to meet the bar, the more attached they are to the group.

At first, the trials were arbitrary and I don’t exactly remember what I did for them beyond just talk to the person over the course of a few sessions. But I realized that I could actually get them to participate, work, and deposit their money into the bank.

Soon, I set a threshold amount that someone would have to generate and deposit into our faction bank to survive the trial. And it worked. Once they were fully “in”, they were promoted to a baseline rank and the requirement to generate a certain amount was removed. Existing members were also given payouts for identifying good recruits that converted. I had created a referral system, and it worked really well.

While I don’t remember the exact member count, soon we were over 50 people. There were about 5 core members/leaders, and the rest were at lower ranks.

Money in my sleep — 2014

I would log off in the evening and go to sleep. When I woke up in the morning, I would log on again and check the faction’s bank account. Lo and behold, it was higher. Sometimes much higher.

At this point I could say that people were making (virtual) money for me overnight. Of their own accord. Not for real rewards or incentives, but for fake ones. And having fun doing it. Wow!

If someone spent money on printers, defense weaponry, or anything else that cost money — they could simply ask to be reimbursed. Even if this system was ripe for theft, the money was so big that it didn’t matter. Day after day, money in was an order of magnitude larger than the money out. We could afford to basically hand out massive amounts of money to people all the time and it wouldn’t make a dent.

Guarding the loot — 2014

One concern that I had was that people would stop depositing into the faction bank, or skim off the top, and I’m certain that some did. But usually, there were multiple people on at a time, some of which would be core members who could “watch over” the footsoldiers. It made it hard to steal this way when people were watching, but stealing still wasn’t eradicated. Raiding parties on our operation were a common problem as well.

In the game, it was common for people to try to raid you for your valuables (illegally), or for police to try and do the same (legally). After a few small raids, I made it a requirement that at least 2-3 people be on guard at all times when running the operation. Other rules were created as we ran into more problems, but eventually, most of the people in the faction were self-sufficient. Having the proper defense weaponry and people keeping watch solved most problems, but not all.

One day, someone suggested to me that I could just build a structure and place everyone’s printers in there for collection, instead of having each person manage their own printers in one place. I couldn’t believe I hadn’t thought of this.

In the game, you could build small structures and doors. These could be remotely opened and closed by the owner of the door, and made it easy to protect your physical equipment or valuables from others. If someone was determined, they could break through the door anyways, but it made noise and if you were around you could defend it.

So from then on, that’s what we did. People would purchase printers and be reimbursed generously, and we would place those into a central collection room. Me or another core member would control the door and collect before depositing into the faction bank.

I think this probably eradicated most of the stealing, and most collection inefficiency. It was more organized and easy to track, and it ensured that collection periods were more consistent (rather than relying on a bunch of different members to do so).

To make sure people did this when core people were offline, we made money generation more of a factor in getting promoted to a new rank. If you generated enough, it was looked favorably upon when determining who moved up the ladder.

Stamping out competitors — 2014

Because our entire business model just revolved around guarding and collecting from our printers, we had ample time and manpower to do other things around the map. That mainly involved stamping out threats, recruiting new members, and pre-empting any problems that might come about.

It was a great business model not just for the owners, but also for the foot soldiers too. Most of the time, they either didn’t have the sway, skill, or desire to organize their own version of this operation. On top of that, we had reached a scale that meant it would be more lucrative for them to just stay in our operation.

If they left the organization to start their own, or tried to poach people from ours, or did anything to compete with us — we would do our best to make their lives miserable. We would send raid parties over to them every time they came online, we would offer large sums to poach any members they recruited, we would install people in the police department to confiscate their property, and do anything else we could think of to make it impossible to compete.

Hacking the bank — 2014

One day, I received a message from one of my lieutenants telling me about a new bug that he had just discovered in-game, and he told me to get on right away. I booted up the game and got on to go talk to him.

He said that he found a way to “hack” into any faction and become the owner. The way he did it was by going to create a new faction, and typing in the name of an existing faction before submitting.

This would make him the new owner of the faction he just typed in, and he would be able to withdraw all of the funds from their bank account.

Of course, we both had the same idea. Our plan was to select the second richest faction, next to us, and withdraw all of the money from their bank.

From there, we would try different ways to “launder” the money. We could drop the money in cash form and have another player pick it up. We could deposit it to a personal bank and pull it back out. We could try a bunch of different things until eventually we could deposit it back into our own faction bank.

The only reason to launder the money was to obfuscate the trail from developers. The players themselves wouldn’t be able to do much about it.

If we deposited it into our faction bank over time, it would have been plausible to the developers that our faction made that much money per deposit from counterfeiting, and that it was our own money we were putting in.

With hindsight (morals aside), this was really stupid. If we wanted to be amoral and smart, we would have picked a set of smaller factions to test this out with. Or, we would have withdrawn a smaller amount of money. The only way to actually get away with this would have been to not attract the attention of the developers.

But we were young and stupid (and vicious) and decided to go through with our plan.

So, I instructed my “operative” to exploit the bug, withdraw the money, and distribute it quickly to a few people in the core group.

Unfortunately, the owners of the other faction caught on very quickly and alerted the developers. They were confused at first, but the developers quickly caught on to who had done the withdrawing and banned him (eventually he was reinstated). He never told them that I was the one that instructed him to do it, and I’ll never understand why!

While this heist wasn’t successful, it laid the groundwork for new “launderette” operations in the future.

Corporate espionage — 2015

Soon enough, other factions started to take root. They all started small, but soon their balances began to rise. I started to get worried. Larger factions were harder to displace, and maybe I had let them get too big.

In hindsight, I should have been more paranoid! We got arrogant and complacent in our #1 position, and slowly but surely other factions started to gain on us.

Once I realized this was happening, I had to act. I assigned a few people in my organization to the #2 and #3 factions, and this is how it would have to go: they would pretend to leave my faction in anger and dislike for me. Then, if needed, they would make friends with the people in the other factions (I tried to pick people who were already friends to avoid this step altogether). Finally, they would join the faction and slowly gain their trust, either until they got bank access — at which point they could transfer back to my faction and keep a massive cut — or simply stay in the faction and report back information about their operations so that we could interfere.

But it didn’t really work, because both factions had reached enough critical mass to keep making money despite our raids and interferences. Neither person was able to fully gain trust enough to empty the bank accounts either. The only way to compete was for us to maximize our own operation.

Winner and aftermath — 2015

The #2 faction at the time had just succeeded in recruiting a few members of my own faction (who genuinely disliked me) and they started to pull in more new recruits than us.

They copied the playbook that we had operationally for guarding and collecting from the printers, and they also had the same kind of incentive setup. The difference was that they didn’t really focus on ranks, they just invited everyone. The “status” was just in their ability to group up and bully others in the game (much like I had done on a smaller scale).

But more people meant more printers, which meant more money coming in. There is no end to the game, and sooner or later, many of our members stopped playing as much. The problem is that momentum begets momentum, and our faction was losing steam.

I was losing steam too, and I wanted to live a bit more real life. I was just about to enter high school about that time too. It was time to give in.

Soon, the #2 faction became #1, and we were displaced. Another headstone in the graveyard of video games. Once the #1 status had been lost, I officially quit the game.

But to be honest, I wasn’t sad about it. I was happy to have had the experience (even if it was virtual). I wouldn’t trade it for the world.

Lessons from the virtual world

What do I make of all of this? I think it taught me a lot about behavioral tendencies, incentives, personal tolerance for change (and to some extent, bad behavior). This meant finding workarounds for what originally seemed like a static problem, persuading people to join and work on something for me, ensuring they were retained through proper incentive models.

They had to feel special in order to be loyal, and giving status and rank was important. But status and rank were only important if there were trials to go through to achieve them. We ourselves create the meaning of status and rank — they are not intrinsically valuable.

I underestimated how much people desire status and symbolism, even if it isn’t accompanied by extra pay or money. In the game, this would mean promoting people to a new rank, giving them token responsibilities, creating a hierarchy that they could climb through.

Companies in the real world do this all of the time, but sometimes blunder when they try to apply it evenly. I do think some employees are wiser about this in new generations, and resent the employer if no raise accompanies expressions of appreciation and value.

I underestimated how much time and effort people would be willing to spend to work on something completely virtual.

The fact that I could log off and come back on later, and my account would be richer was quite a feeling. My original thought was that people would simply get bored and leave because they couldn’t use their accumulated resources outside of the game. Wrong!

I underestimated how many mistakes and bad behavior people were willing to deal with if (and only if) the incentive structure was great. I tried to avoid behaving badly or making noticeable mistakes, but the young teenager in me was immature and vicious.

The real life parallel to this scenario is someone with “golden handcuffs”, where people stay in bad jobs for good pay. Sometimes the double negative is true as well: people staying in bad jobs with bad pay.

I overestimated people’s tolerance for quick changes or adjustments to operations, incentives, and “leadership”. Most people are extremely resistant to change in any form, so it must be incremental.

I learned how to motivate, how to persuade, how (not) to be an asshole, how to incentivize, how to optimize, and collected mental models that I will use for the rest of my life.