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How A Losing Chess Game Shaped My Start-Up

Blair Hawthorne profile picture
Blair HawthorneFounder & CEO
How A Losing Chess Game Shaped My Start-Up
Blair competing in the Junior World Championship in 2003, aged 12

I was immensely fortunate that the chess I played as a schoolboy took me around the world. The game allowed me to talk on equal terms with players decades older than myself and although I won my fair share, I also suffered stinging and painful defeats I still feel to this day. I was never the most talented player in the competition, but the lessons chess taught me would go on to shape much of my worldview.

Working through my career as a currency trader, and even now as I develop our innovative new business, LoopFX, I still see chess and the pragmatism and honesty it demands everywhere.

Back in the 1990s, I had a rival, Adam Bremner, another keenly competitive Scottish player. We faced each other over the board time and again – the Nadal and Federer of Aberdeen’s school chess scene.

Losing to a rival can shape you

I still remember one particular loss to Adam. We must both have been about 14 at the time and I made a move which I considered strong, conclusive and logical - essentially a game winner. It was only after I’d taken my finger off the piece I realised it was, in reality, a completely disastrous move. I felt that instantaneous nausea, when the reality you’ve been avoiding, sometimes for hours, finally reveals itself. I’d overestimated the strength of my position – or rather I’d failed to be honest with myself about the weaknesses that had been staring back at me for hours.

Losing to a rival can shape you, and that loss more than any other taught me to become a positional player. My approach became patient. I was painstaking; grain of sand piled on grain of sand, always looking to the longer term, not grasping at every opportunity that offered itself as a single, transformative moment, preferring tiny incremental gains, iterated repeatedly. I learned the value of careful, objective analysis.

Years later and that same mindset stayed with me into asset management. I was on a currency trading desk, trading millions of dollars at high speed every day, but I still took the time to examine my deals – honestly, without ego, just as chess taught me.

As I did so over time, it sank in that objectively I’d not been adding as much value as I thought to the majority of my trades. What could be interpreted as my sound judgement was frequently just circumstance flattering my positions, my technology, my colleagues, my employer, all making me look perhaps better than I actually was. My decisions about who to execute deals with often bore little relation to any objective analysis of which bank would have been most effective for each execution. And the chess player within me wanted to do better.

I still have all my chess notebooks; I can look at not only what I did but also how I felt as I did it – chess is steeped in a culture of analysis and often shared analysis with the very person who defeated you. You shake hands and you replay, move by move.

I wanted to design our system with every one of these 200 meetings echoing in my head, like all those chess games in my notebooks

This was the spirit of over 200 meetings with FX practitioners as the idea for LoopFX was shaped, challenged, tested, reshaped and challenged again. I wanted to give traders the real-time information they craved for best execution, and I wanted to design our system with every one of these 200 meetings echoing in my head, like all those chess games in my notebooks.

Our journey has taken us through so many iterations, so many obstacles that needed to be overcome, but the team and I have been determined never to overestimate our position, never to be tempted by a quick victory, to proceed as a positional player and create LoopFX, the tool I wanted as a trader, the tool so many practitioners have asked for but has never truly existed…

Real-time deal matching, that fits within existing workflows, doesn’t need fresh legal arrangements, and improves best execution processes without excluding the banks. It remains both a rewarding and exhausting journey.

I must remember to thank Adam Bremner.

Blair's chess books
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