Squid Games: What businesses can learn from the Netflix smash hit series - Rashmi Dube

If you haven’t seen it, you must have heard about it, and a little warning – this article may contain some spoilers. The story on the surface is a simple one. A group of people are collected, all sharing the same concern – they are in debt due to various circumstances – and their aim is to play children’s games, with the sole winner at the end of all the games winning the grand prize of $45.6bn.

A prize not to be sniffed at and most definitely life changing. It sounds so simple – play a game, with no real investment required from the participants. But there is a catch. Being eliminated from a game means death. What has this got to do with business?

Squid Game has many valuable lessons to be learnt from each episode itself but overall, we can take away three.

1. Sunken costs /The incentive system.

From a clinical economic perspective in decision-making about future costs, sunk costs (also known as retrospective costs) are the costs that have already been incurred and cannot be recovered. In contrast, prospective costs are costs that are to be incurred (future costs) and can be avoided.

The issue, of course, is as humans we don’t see this and therefore consider the past expenditure in our current decision making. Concorde is a great example of a team continuing with the project because they had already “spent and invested” so much as opposed to cutting their losses early.

Squid Game shows us the incentive system at its best. By winning or surviving each game, the players begin to feel that all their effort will have gone to waste if they now do not continue.

They take into account the sunk costs.

They now cannot stop or leave. Incentive systems can work well within organisations.

2) Trust.

The theme of trust runs throughout the series, with questions of who can be trusted, who do we instinctively trust and who is our perceived enemy (the competition – are they actually our competition or is it the person we have trusted?).

Trust in the business world is vital and when you are a start-up, there is very little trust in your service or product – there is no track record and no time to have developed credibility of brand. Squid Game uses the tried and tested method of have a “free trial”. Like free seminars or giveaways, there is the principle of no commitment and see what reward you will receive.

They, therefore, start off with a small game of gambling where if you win you indeed get money but if you lose, you only get slapped across the face – the point being a little pain is agreeable to a monetary gain. So, it is then easier for game organisers to invite the players to the main game. In business, trust runs deep with our clients/customers, but it also runs deep with our teams.

3) Finally, Marketing.

People are subscribing to Netflix just to watch the show. So why is it successful? It’s about the hype.

There are virtually no cultural differences and discrepancies do not really matter. The show is based on human emotions which captures the audience. But how did the show gather momentum in the first place with no marketing before its launch? Word of mouth. The biggest seller still for any product or service. The classic technique.

The modern day case study – Squid Game on business lessons. Are you missing out if you haven’t watched it?

Rashmi Duve is a partner at law firm gunnercooke