The Game You’re Actually In
Revenue is vanity. Yield is sanity. If your business doesn't beat a passive Index Fund after accounting for your stress, you're losing.
When I took over the family business, I thought I was playing a business game. I was actually playing a vanity game. Grow revenue. Hire headcount. Look big. It works for VC-funded startups where losses are "investments." It is suicide for business that generate cash from their business to meet all their expenses on a monthly basis.
The scoreboard for the Social Game is public. It’s likes, congratulations, and "growth" charts. But the Business Game is played in the dark. And it has completely different rules.
System Definition
If you strip away the romance, a business is simply a machine.
- Input: Cash, Time, Human Energy, Stress.
- Process: Value Creation (Product/Service).
- Output: More Cash than was input.
That is it. Customer satisfaction is not the output. "Disrupting the industry" is not the output. Those are just the permission slips that allow the machine to keep running. The only valid output of the Business Game is Yield.
The Siege
In 2021, I hit a wall. One customer controlled ~25% of our revenue. We were billing them ₹48 Lakhs/month. On paper, I had good revenue but in reality, I was bleeding.
The client slowly changed the terms of engagement:
- Credit Period: Stretched from 30 to 45 days.
- Working Capital: My cash tied up jumped from ₹45L to ~₹75L.
- Margins: Service fees squeezed down, driving net Return on Capital Employed (ROCE) to ~7%. Walking away meant shrinking the company by 25% overnight, barely a year after I took charge. So I removed emotion and looked at the P&L. The math was embarrassing.
Three Simple Axioms of the Business Game
I decided to exit the ₹5.76 Cr contract. Looking back, I realised I wasn't just fixing a margin problem. but aligning with three basic axioms of business that I had violated.
Axiom 1: Customer Satisfaction is a Constraint, Not a Goal
In the Social Game, "The Customer is King." In the Business Game, the Customer is a variable. You need happy customers to keep playing (Survival), but if making them happy costs more energy than the cash they return, you are failing the system. You don't exist to serve customers. You serve customers to exist. If a customer demands inputs (60-day terms, 24/7 stress) that exceed their output, they are a bug in the system, not a feature.
Axiom 2: The Benchmark is the Nifty, Not Your Competitor
In the Social Game, you compete against other founders. In the Business Game, you compete against Passive Capital. If your business generates a 12% return on capital but consumes 60 hours of your week and 100% of your sanity... You are losing to a boring Index Fund that generates 12% with zero effort. If your "hustle" doesn't generate Alpha (excess return) over the Nifty, you aren't an entrepreneur. You are an inefficient asset manager.
Axiom 3: Volume is Vanity, Velocity is Sanity
The Social Game loves volume. "We manage 5,000 people!" The Business Game loves velocity. "How fast does ₹1 leave and return as ₹1.20?" I used to brag about managing huge teams. Now I realize that managing people is the cost of doing business, not the badge. The best business is the one that generates the maximum output with the minimum number of humans and the minimum amount of capital.
The Monday Morning Raid
If you are stressed but "growing," you are winning the Social Game and losing the Business Game. The Social Game pays in likes. The Business Game pays in freedom. So make your choice and pick one.
Ask yourself two simple questions:
- The Nifty Test
If I invested the capital required to service this client into the Nifty 50, would I earn more with less stress? - The 15% Rule
Does this contract clear 15% net return after all overheads—cash, time, and attention?
If the answer is no, you are not growing. You are financing someone else’s operation.