In this article I’ll be talking about how I made use of AIs in Capitalism Lab. This in order to free up my time as the Chief Executive Officer and Chairman. By saying “AI-run operations” I mean of course how I give instructions to AI-run COO and other company CEOs.
The concept of having AI run manufacturing or retailing operations is a fascinating one on its own. I thought about it a whole lot. Here’s a link to an interesting MIT article on the subject. Yet again an example of Capitalism Lab being a useful game for pondering actual business issues.
In the last article in Proqet’s series on Capitalism Lab (our somewhat of a strategy guide) I continued to build out Bintel Corporation as a conglomerate I want it to become. I built on top of the vertically integrated manufacturing and retailing operation. I appointed the AI player Jack Ma as the COO and opened new discount megastores in Tokyo.
Largest Company In the Capitalism Lab World
Bintel’s debt had ballooned to 230 million (most debt of any company). At the same time it had become the largest company in the game world. This was by the measures of:
- revenue
- earnings
- amount of employees.
Growing My Company
Now it would be time to continue Bintel’s aggressive expansion by building out more giga factories in Harbin.
I set the first new factory to produce Early Computers as these were the best-selling product in Bintel’s catalogue. There was already a buildup in demand which had lead to worse supply of the popular product. It would be terrible to have supply problems. This as every computer that wasn’t supplied to the stores in Tokyo would be reduced from Bintel’s potential sales.
I put my new Chief Operating Officer, Jack Ma, in charge of the new factory. As Jack’s manufacturing expertise is 80/100, I can trust him to do a good job of running the factory.
The benefit of having the AI take over factory management in Capitalism Lab is that if there’s supply shortages (ie a supply needed in manufacturing a specific product), the AI will detect this and change the place they order the supplies from automatically.
I had earlier given Jack instructions to be wary of low supply. The goal was to regularly revise sourcing of the raw materials. This in order to prevent production hell when there’s no needed supplies available. This without me having to do it as the CEO frees up my time for other, more strategic decisions.
New Factory In Harbin, the City With Lowest Real Wage Rates
The next factory would cost 6.5 millions to build and it produces Crème Lipstick. Jack Ma was yet again put in charge of the operation.
The factory founded earlier producing Early Computer is turning out a nice profit. Delivering new PCs to be sold in Tokyo discount megastores is running smoothly.
Ballooning Debt – a Problem Or a Blessing?
At this point Bintel was again eligible for a new bank loan. The total debt ballooned up to 229 million from the earlier 223 million. Debt interest is monthly 1,3 million with the current interest rate at 6,75%.
My company’s numbers start looking better as profits go up and revenue has broken through 100 million. The company’s net worth is steadily climbing as I’ve bought land and built factories and stores.
Checking in at the bank again Bintel was eligible for another 36 million dollar loan. This brought total debt up to 265 million and cash in the bank to 60 million.
Expanding My Retail Store Empire
With the new cash in the bank I built a new discount megastore in Tokyo. This store would sell the 4 products from before: Early Computer, Crème Lipstick, Bath Towel and Leather Wallet. These would come from the cheap factories in Harbin.
I built yet another discount megastore.
Checking in at the bank they gave me another 18 million dollar loan bringing total loan up to 283 million.
Built another discount megastore with the money in the bank, costing 22 million.
As Bintel’s discount megastores are pumping out cash the bank is allowing me to take another loan 47 million. I now have 72 million in cash to be spent.
Built another discount megastore for 22 million with the same products and Jack Ma in charge.
Capitalism Lab Goodies: Expanding Production
Next I would need to expand production again. This because the increased amount of stores means more demand for the factory produced goods. I built another factory in Harbin for 7 million.
I set the factory up to produce bath towels and made Jack Ma be in charge of the production. Here in between I take an 11 million loan. As telling about taking a loan starts getting repetitive I won’t dwell too much in that. 😁
Investing In the Stock Market In Capitalism Lab
At this point there was 60 million in Bintel’s bank and I wanted to start making acquisitions. I saw a potential fast grower in Google, a tech company selling a search engine, but I didn’t have the required 694 million to buy it.
I settled on buying 5% of both Novartis and Office Depot. Both of these companies had recently become profitable and this according to me shows signs of a functioning business model. I also took a loan of 5 million.
Corporate Comparisons: Rankings of Top Dogs
At this stage, Bintel corporation is the 1st in revenue, profit, debt and efficient use of capital (ROE and ROA). Unfortunately, the massive debt of 346 million also makes Bintel the most indebted company in the game world.
Summary Of Part 3 Of Capitalism Lab Strategy Guide
At this point, I’ve built out a vertically integrated manufacturing-retailer -operation with 4 products that all have R&D projects in order to improve their quality. I’ve set up aggressive marketing campaigns in Tokyo, the city in the game world with highest average salaries. I’ve expanded in Tokyo by building in total 14 discount megastores, selling the cheap products from Harbin for high price tags.
All of this expansion has made possible by me having Jack Ma as the AI COO. This is a crucial part of Capitalism Lab game strategy. By having the AI staff do the monotonous work of managing supplies in factories and setting competitive prices in retail stores the player has the possibility to focus on the more strategic decisions of the business. In our case, building out more production and retail and allocating capital efficiently. I even bought my first stock in publically traded companies and now own 5% of both Novartis and Office depot. These stakes, if they increase in value, will boost Bintels’ net worth and work as collaterals for more loans which can be used to grow the company.
To be continued in the next article!
Side note: Industry Giant 2, while being an interesting and variated game, lacks the opportunity to appoint AI managers which makes fine-tuning prices and managing production and logistics chains a chore. I wish they’d taken a more Capitalismesque way here.
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