I recently watched the movie, “Rounders” for what was probably the 100th time I’ve done so. If you’re not aware of the movie, it’s basically about the dark side of underground high-stakes poker. Movies like this also seem to make a correlation to business for me. For instance, the main character, Michael McDermott says, “Why do you think the same five guys make it to the final table of the World Series of Poker EVERY YEAR? What, are they the luckiest guys in Las Vegas?”
That makes me think of the same entrepreneurs that start one business after another, and all succeed. Do you think that’s luck? Hell, no! It’s knowing when to take a calculated risk, understanding the odds, hedging bets when necessary, being patient, exploring opportunities to increase your bankroll and knowing when to take a competitor head-on. It really is a mindset… But we must always remember, you can’t lose what you don’t put in the middle. [pause] But you can’t win much either.
What can entrepreneurs learn from playing poker?
Poker can be seen as a leisurely game by most people. It may be looked at as a viable way to relax and unwind after a week of decision making, handling issues, and addressing challenges. Essentially a pause from life. On the flip side, there are individuals earning a living by playing poker, leading an independent lifestyle and building a secure financial future.
Whether a friendly neighborhood poker game or one that takes place down at the local casino, there is no doubt, poker is a game of skill. There’s a lot that can be learned from this all too familiar game.
Below are nine skills from an article I’ve read in Entrepreneur India, an international franchise of Entrepreneur Media. These skills help poker players win at the poker table but also good for individuals to grow professionally, to improve their analytical skills, to help address stressful situations, and ultimately to win, maybe win big, at the game of business.
1. It starts inside your head
Poker is a mind-sport and so is business. It is all about the moves you make, the strategy you take, and who you decide to play against. Your mental conditioning must be top-notch, and you must be prepared to take on any challenge. Unless your mind is in the right place, your game will suffer.
2. Being process-oriented, not result-oriented
Captain Picard from Star trek said that “It is possible to commit no mistakes and still lose.” You can play a hand of poker perfectly and not come out on top, just like you can do everything right with your company/business and still not hit the goals you were after. But this problem is short-term. It’s all about getting your fundamentals right and if you don’t succeed, try again. In the long run, making the right decisions is what will make you a winner. Reckless decisions might help you rise, but they won’t keep you on top. Sensibility will always conquer luck.
3. Reading your competitors
At the poker table anticipating the affinity of your competitors toward risks will help you decide the best moves to make. Additionally, knowing their strengths and weaknesses will take you a long way and help counter them effectively. Similarly in business, you need to do your due diligence to understand your competition, and only then can you stay one step ahead of them.
4. Factor in every scenario
Poker is unpredictable, and so is business. When making a move, you need to factor in every possible eventuality, most importantly the worst case, and then act accordingly.
5. Folding your aces
Aces are the best possible hole cards you can get in poker, but as the game goes on, you may realize you don’t have the best hand overall because of the cards that open. Similarly, you might have the best product in the market, but unless conditions are conducive, it might not reach the heights it merits. It’s important to not get disheartened and understand that these things happen.
6. The pressure is for cookers
When the stakes are high is when you can win the biggest. Not letting the pressure get to you is the name of the game.
7. Bankroll Management is key
If your total bankroll is low, you don’t go play a High-Roller game with a high buy-in. It is important to be financially sensible.
8. Never chase losses
When you lose multiple hands in a row, you might be tempted to play just because you want to recover your loss or reputation. This line of thinking will impede judgment and might turn out to be harmful. Make every move at its own merit and never because of earlier results.
9. Most importantly, you must do it responsibly
Being cognizant of your own capabilities is of utmost importance, both in poker and in business. What are the stakes you choose to play at? How much do you invest? How much time do you put into it? One of the most important things to remember is also that an excess of everything is bad, and the minute you feel that the quality of your personal, professional or family life is being affected by your decisions, it is time to take a step back and ask yourself what you should change.
There have been a number of great articles written about poker and entrepreneurship. I’ve listed some of my favorites below:
Thinking about poker and the skills necessary to win – whether in a neighborhood or professional game – has me also thinking about the skills entrepreneurs must develop and hone to succeed in their endeavors. So, my Question of the Week is:
What skills are necessary for today’s entrepreneur to succeed, and at a high level?
I look forward to reading your responses and learning your perspective. In my humble opinion, entrepreneurship will be the mechanism that will propel our country through uncertain times we’re all facing. I do believe it’ll be a massive collaborative effort of entrepreneurs everywhere to ensure our full recovery. Helping and learning from each other is imperative.
Now, I can’t seem to get Kenny Rogers’ song, The Gambler out of my head.
You’ve got to know when to hold ’em, know when to fold ’em. Know when to walk away, and know when to run…
Have a great day. Make it happen. Make it count!