Have you seen Squid Game, the new Netflix show from South Korea? It recently became Netflix’s most watched show, drawing more than 111 million views.

Squid Game isn’t about innovation or tech, but it feels very relevant to the life of an entrepreneur and to start-ups more broadly. Let me tell you why. The plot is simple: you take 456 people deeply in debt, and you have them play a series of children’s games. The cash prize is US$40Mn, and there can be only one winner. It sounds attractive, but the penalty for losing at any of the games is death.

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I loved it. I loved it so much that I watched all the episodes in one sitting last Saturday. The show is a great framework to understand how people react to high stakes. It has powerful lessons, particularly for entrepreneurs. Let me explain.

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From here on, expect small spoilers. If you haven’t watched Squid Game and want to, then please read the below after you’ve watched it.

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Squid Game is not about the games, or the killing. It’s about psychology. Why would anyone participate in a game that could kill them? Anyone who thinks the risk is worth it. Everything in life is risk and reward. Why would you fly a plane that could kill you if it crashed? Because you want to go on holiday enough to take the risk. The reward justifies the risk. Now imagine your life were a nightmare, and there was a way to solve all your problems. How much risk would you be willing to take? If you’re an entrepreneur, then your framework shouldn’t be all that different from the players of Squid Game.

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High risk / high reward

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Paul Graham, a major figure in start-up investing, coined the phrase “default dead” for start-ups. A start-up comes into the world with a problem to solve. If it cannot solve it without being sustainable, then it will die anyway. Every player of the Squid is also “default dead”. Like many viewers of the show, I couldn’t help wondering: What would I do if I were them? Would I take that bet?

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Versions of these questions make up the daily life of an entrepreneur: ‘If I put resources here, is the reward big enough?’ Success comes from risk. If you can’t take risks that could kill your start-up, you’re very unlikely to find “default alive”.

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All for one, one for all

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In the first episode, there is a vote to end the game. Nobody can leave the game, leaving means death, but if the majority votes to end the game, then everybody can leave alive. This resonated a lot with me because everyone agreed on a common purpose. The same holds for start-ups. Start-ups are fighting for something which doesn’t yet exist; without a team who wants to build it, it has no chance of existing. Of course, founders need to set the ship’s direction, but the team operates the ship. Without a team, the ship might sail downstream on a river for a while, but it won’t sail on an ocean.

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This means every project, every decision made by a company needs buy-in from the team. Achieving this isn’t about accounting for everyone’s views- it is often about disagreeing then committing- and that can only happen when people trust the person directing the ship. The moment when a team does not believe in the vision, or that it can work, the game is over. Normal life resumes.

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You don’t know until you’ve tried

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A few episodes into the show, something (I won’t say what) happens which illustrates an important point: you cannot appreciate the game, unless you play it. This resonates deeply with me.

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Before I started my first company, I thought I understood start-ups. I had read all of Paul Graham’s letters, watched all the Y Combinator office hours on Youtube. I had spoken to my most successful investors friends, who had told me how to build a start-up. I wanted to solve a problem enough to try, so I decided to refuse a great job offer, quit my comfortable job and go for it.

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Reality hit hard and fast. Within months, I was sleeping on the floor of my friend’s apartment, I had sold everything expensive that I owned and was working 15 hours a day. I had no idea what I was getting into.

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Watching others do something does not mean you understand it. Do not let anybody tell you what the rules of the game are, particularly if they haven’t done it.

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Jordan,

CEO & Co-founder of nr2