How Playing Transport Tycoon shaped my Entrepreneurial Skills
Updated: Mar 30, 2020
Transport Tycoon is one of my favorite games of all time. I saw it for the first time back in 1999 although it was created almost five years before. I simply loved it. I was in my early teenage age and has been one of the first computer games my kids have played with.
With OTT I learned to navigate different scenarios and made hundreds of debt mistakes. And learned a lot from those.
Besides being similar to the popular Sim City, Transport Tycoon had something special. You could help shape the cities with the projects you launch. You had the chance to create an impact in the local economy of the areas: expand suburbs, avoid factories to close due to lack of supplies, help people move around, and even plant trees to prevent pollution. I learned there to be an entrepreneur and to make a change on those little maps; and it has been like that since then for me but in real life. Playing Transport Tycoon shaped my entrepreneurial skills.
Here is why:
IMPORTANT NOTE: Although we are talking about a vintage game, you can play it today. A massive community of developers built Open Transport Tycoon: an Open Source modern remake of the old game that anyone can download and install on most popular computer platforms.
When you start an Open Transport Tycoon (OTT) game, you begin with 100% borrowed capital. The yearly interest on the loan is 10%, and you can extend it with no credit limitations. Yes, that was complete irony, but it is the only difference with what we could call "a real-world scenario". You begin with borrowed money, and you assume all the risks of making it work.
Money can be borrowed and repaid in batches of $20,000, up to a maximum of one million. Interest is paid yearly and does not compound on the loan amount.
A Statement of Cashflows helps you keep track of your business in real-time. It is grouped by year and, although you can open it up anytime, it shows up every Jan 1st.
As I've mentioned in other articles, developing a "debt management muscle" is essential for entrepreneurs. Debt is the same as the villain or as the super-hero, depending on how well you learn to use it. With OTT I learned to navigate different scenarios and made hundreds of debt mistakes.
And learned a lot from those.
Analyzing Data and Optimizing Revenue
The game was originally designed/conceived in the mid-90s. And that same look and feel were maintained by the developers of OTT. The game delivers a lot of graphical analysis tools that come very handy for understanding how your business is going.
Operating Profit Graph on OTT.
This was one of the first times (as a teenager) I took "an investment" decision based on analytical data. In the long run, it is the same common sense applied for investing in the stock market, business projects, and real-life scenarios.
Cargo Payment Rates based on the transit time in OTT.
Nowadays I use systems like Google Analytics, Google Ads, QuickBooks, Stripe, and multiple other graphical analytic tools that are key for data-driven decision-making purposes. I build my own custom spreadsheets and then use charts to understand trends, rates, and behaviors. Just as I used to do back in 1999.
The concept behind OTT is to start and succeed in building and scaling a transport company. The game usually begins in the year 1950 and it takes about 15 minutes to complete an entire 365 days cycle. You always start with a map that includes dozens of cities, factories, natural resources, and opportunities to build a transportation business.
From airplanes, ships, and trains to autobuses or cargo trucks, you have multiple means to move things around. You can build roads, railways, bus stations, airports...
You can try to connect and move passengers between closer cities through the road while ships, trains, and airplanes can be used in more distant scenarios. The alternatives are endless. I've played more successful matches where aerial transportation was a complete failure while managed to succeed based only road services, mostly due to the topography of the cities.
Diversification has been key for the businesses I've built over the past decade. Also for my investment portfolios, assets, and even for my personal career. I will talk about this in a future article.
Plus Many Other Skills
I could count many more, but to add some other key skills:
Budgeting and Taking Risk: Each project you launch (new road, airports or interconnection service) comes with a risk. As I mentioned before, you start with borrowed money. If it all fails, then all the investment was an expensive lesson. Budgeting is one of the things you begin to develop during the game while also trying to make sure not to screw up the business.
Dealing with Competitors: In OTT you can setup AI competitors to go over the same market too. They provide services the same way you do
Company Acquisitions: I have acquired private companies in real life (as so stock of public ones), but my first acquisitions were all made playing Transport Tycoon. Understanding the value of assets, locations, contracts, liabilities, and open business opportunities come very handily as a learning path for the future.
Opportunities: During the game, many new vehicle models get launched exclusively before these are made available to other competitors, and multiple subsidy options show up with attractive incentives for new transport connections. On tough scenarios with numerous competitors, it is a very competitive
I have to say that my kids play OTT too. Although I'm damn proud they enjoy doing it, in the long run, same as probably everyone who has dedicated hundreds of hours to it, they will look back and understand how good school was that.
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