You might not think that poker and start-ups have much in common; after all, one is a card game, and the other is a business. But look a little closer, and you’ll find that there is a lot that entrepreneurs can learn from the game that is relevant to their business success. Balancing risks and rewards, learning to bluff, covering your bases and finding that alligator blood tenacity are all key elements of both arenas. In truth, there is nowhere better to hone your skills as a start-up entrepreneur than at the card table.
Weighing Up the Risk
You might think that success in business is all about taking risks, but it is not quite as simple as that. Leonard Green, who lectures at America’s top school for entrepreneurs, explains “Entrepreneurs are not risk-takers. They are calculated risk-takers.” Just like a card player, who carefully weighs up the strength of his hand and the potential of his fellow players before placing their wager, the most successful entrepreneurs only take risks after due diligence and research.
Anyone can risk everything, but as Leonard Green goes on to say, “The difference between risk-takers and calculated risk-takers is the difference between success and failure.”
Photo by Brian Solis, CC BY 2.0
Caption: Mark Zuckerberg: “The only strategy that is guaranteed to fail is not taking risks.”
That is not to say that you shouldn’t take risks. Just like poker, playing it safe won’t get you far in business, especially if you have a groundbreaking new idea for your start-up. “The only strategy that is guaranteed to fail is not taking risks,” says Facebook founder, Mark Zuckerberg, one of the greatest start-up success stories of all time. Amazon founder, Jeff Bezos agrees. “I knew that when I was 80, I was not going to regret having tried this … I knew the one thing I might regret is not ever having tried. And I knew that would haunt me every day.”
Playing poker teaches you how to weigh up your options fast, reading your rivals and making decisions based on as much information as you can gather in a short time. Just like poker players, entrepreneurs won’t always have all the information they need, so you need to hone your instincts to work with what you have and make the best call you can.
Bluffing Your Way In
Perhaps the biggest risk in poker is the bluff, but once again, this can teach us valuable skills that can be used to get ahead in business. Damien Steel is an expert on investing in early-stage technology start-ups for one of Canada’s largest venture capital funds, OMERS Ventures. He is also a big believer in bluffing.
“As a start-up entrepreneur, you need to have a market-fit product before you spend a lot of money on a company,” he explains. “You could have the coolest technology in the world, but if no one is willing to pay for it, then there’s no business. You have to fake it; fake the product until you’re sure someone is willing to pay for it.”
Though it might seem like an extreme strategy, it is one that worked for a fledgling tech entrepreneur you may have heard of called Bill Gates. He got started by bluffing his way into a meeting with the president of MITS by telling him he had some exciting new software to show him, but he didn’t invest any time in writing the program until MITS agreed to see him.
Photo by DFID, CC BY 2.0
Caption: Bill Gates – Bluffing his way to the top.
Becoming a Real Player
Some entrepreneurs have even combined their love of poker with their ambitions in business in a direct way. Luca Pagano used his poker skills to set up the Italian Poker Championships, which went on to become the Italian Poker Tour.
“I’ve always had a business-like approach to poker,” he says. “As a player, I like to calculate everything at the table — the risk, the investment, the reward.” So, it made sense to him to take a poker-like approach to business, and it has paid off.
As entrepreneurs, we can all learn a lot from this game. As David DeRam says, “Poker is a nice and a fun way to hone the soft skills that you need to use every day when you’re starting a business.” It’s better and more fun than learning the hard way.