Introduction
I recently read James P. Carse’s “Finite and Infinite Games,” and it fundamentally challenged my thinking about technology company building. Although Carse’s framework isn’t specifically about business, it profoundly challenges one of startup culture’s core assumptions: the primacy of the exit strategy.
Carse distinguishes between two types of games: finite games played for the purpose of winning, and infinite games played for the purpose of continuing play. This distinction illuminates a fundamental tension in how we build companies today. The conventional startup wisdom, deeply embedded in accelerator programs and venture capital discussions, treats company building as a finite game — complete with clear winning conditions (the exit) and defined rules of play (growth metrics, funding rounds, market positioning).
But this finite-game mentality may be fundamentally at odds with building truly innovative, lasting companies. Consider the trajectories of companies like Apple, Amazon, Microsoft, and TSMC. While they could have optimized for early exits, they instead chose to continuously redefine their possibilities, expanding into new markets and technologies in ways their founders couldn’t have initially imagined. They approached business as an infinite game.
The Conventional Exit Narrative
The traditional startup playbook is clear and seductive: build something valuable, scale rapidly, and position for an exit — whether through acquisition or IPO. This narrative is so entrenched in startup culture that investors frequently ask, “What’s your exit strategy?” We’re taught to think of company building as a finite-game with clear winners and losers, defined by metrics like valuation multiples and exit timelines.
But what if this finite-game thinking fundamentally limits our potential to create lasting impact?
The Problems with Exit-Oriented Thinking
The problem with exit-oriented thinking isn’t just philosophical — it has significant practical implications for how companies operate and grow. When ‘winning’ is defined solely by selling the company, it creates several challenges:
First, exit-oriented strategies often lead to short-term decision making. When building for an acquisition or IPO within a specific timeframe, companies may prioritize metrics that look good in a pitch deck over sustainable business practices. They might cut corners on culture, accumulate technical debt, or sacrifice customer relationships for growth numbers.
Second, this mindset can stifle innovation. True breakthroughs often require extended periods of experimentation and learning. When every decision is evaluated through the lens of how it affects a potential exit, companies become risk-averse, focusing on incremental improvements rather than transformative possibilities.
Third, exit-oriented thinking can create misalignment between founders, employees, and customers. When the ultimate goal is to “win” by selling the company, it’s harder to build the deep trust and commitment needed for long-term success. Employees sense they’re building something temporary, and customers may worry about what happens to products and services post-acquisition.
The alternative is to approach company building as an infinite game. This doesn’t mean never selling the company or going public — rather, it means viewing these as potential phases in a longer journey rather than ultimate destinations. Companies built for continuation focus on different metrics:
- Instead of asking “What will make us attractive to acquirers?” they ask “What will allow us to keep creating value for decades?”
- Rather than optimizing for short-term growth metrics, they invest in sustainable advantages and capabilities that compound over time.
- Instead of viewing talent as a resource to be utilized, they build cultures that develop people and encourage them to grow with the company.
This shift in mindset has profound implications for how we structure financing, approach product development, and build teams. It might mean choosing slower growth to maintain independence, or passing on acquisition offers to pursue longer-term opportunities. It certainly means being more selective about investors, choosing those who share a vision of building something lasting rather than those pushing for quick returns.
Ironically, companies with an infinite-game mindset often become more valuable, even by conventional standards. By focusing on continuous innovation and adaptation rather than exit timing, they build deeper moats, stronger cultures, and more sustainable advantages. They become the kind of companies that others want to acquire or invest in precisely because they weren’t built to be acquired.
Carse’s framework helps us understand why the exit-oriented mindset can be problematic. When we play finite games, we become preoccupied with tactical advantages and short-term wins. We optimize for metrics that make us attractive acquisition targets rather than building sustainable value. This often leads to:
- Short-term decision making that sacrifices long-term innovation
- Focus on growth metrics over genuine customer value
- Cultural decisions that prioritize quick wins over sustainable practices
- Product decisions driven by market positioning rather than true innovation
This mindset, while prevalent, isn’t the only way to approach company building. An alternative framework, inspired by Carse’s infinite games, offers a path to sustained innovation and value creation.
The Infinite Game Alternative
Instead of viewing our companies as vehicles for exit, what if we approached them as platforms for continuous innovation and value creation? Carse writes that infinite players play with boundaries rather than within them. Applied to company building, this means:
Creating Evolutionary Organizations
Rather than optimizing for a specific end state, build organizations that can continuously evolve and adapt. This means developing strong learning mechanisms, embracing experimentation, and creating cultures that can sustain innovation beyond any single product or market opportunity.
Focusing on Strength Over Power
Carse distinguishes between power (the ability to control outcomes) and strength (the capacity to remain open to unknown possibilities). In business terms, this means building resilient organizations that can adapt to changing circumstances rather than trying to dominate current markets.
Redefining Success
Instead of measuring success by exit valuations, focus on metrics that indicate sustainable value creation: customer impact, employee growth and satisfaction, innovation capability, and contribution to the broader ecosystem.
Real-World Examples
Consider these concrete examples of infinite game thinking:
- Basecamp: Rejected traditional VC funding to maintain control over their growth pace and product decisions, leading to sustained profitability and cultural integrity.
- Mailchimp: Bootstrapped for 17 years before a $12B acquisition, maintaining independence to focus on small business customers rather than chasing enterprise deals for faster growth.
- TSMC: Built a long-term strategy around manufacturing excellence and continuous reinvestment in capabilities, becoming indispensable to the global semiconductor ecosystem.
Each of these companies prioritized sustainable growth and mission alignment over quick exits, ultimately creating more significant long-term value.
Practical Implications for Founders
Playing the infinite game doesn’t mean never selling your company or going public. Rather, it means making these decisions from a position of strength and purpose rather than as predetermined goals. This approach involves:
- Building sustainable business models that don’t rely on continuous external funding
- Investing in culture and people development for the long term
Maintaining strategic independence in decision-making
- Focusing on customer problems and innovation rather than competitor moves
- Creating governance structures that support long-term thinking
The Investor Challenge
One significant challenge to playing the infinite game is the current venture capital model, which often enforces finite-game thinking through fund lifecycles and return requirements. However, we’re seeing the emergence of alternative funding models — from revenue-based financing to long-term capital vehicles — that better support infinite game approaches.
A New Vision for Tech Entrepreneurship
As we face increasing questions about technology’s role in society and the sustainability of current business models, perhaps it’s time to embrace a new vision of tech entrepreneurship — one that measures success not by exits but by sustained contribution and innovation.
The paradox Carse identifies is that those who play only to win often end up losing what made the game worth playing in the first place. In contrast, those who play for continuation often create the most lasting value — and, ironically, might end up with better financial outcomes as a result.
As tech founders, we can rewrite the rules of company building. Instead of asking, “What’s your exit strategy?” we should ask, “How will your company create value for decades?” I plan to be here, creating products that will greatly improve the lives of our children. This shift in thinking might just lead to more innovative, sustainable, and ultimately successful companies.
The exit isn’t the end of the game — it’s just one possible move in a much larger and more meaningful infinite game of creation and innovation.
