Millions of people around the world are playing poker and running a business — and many are doing both.
Of course, you may already be aware that businesses and poker players share many of the same strategies:
- pay close attention to the competition
- adapt to constant change or fail in a crowded field
- overcome short-term variance with long-term results
- grinding long hours is often necessary to win
- know your edge and focus on where you make your money
- plug your leaks by measuring everything and keeping expenses in check
- analyze and study hard to outmaneuver your competition
- select an area where you can be competitive and win
- control and overcome negative and unproductive emotions
…and the list goes on.
Much has been written about these similarities, but with today’s startup culture, we thought it would be interesting to explore the concept of poker player as a startup business.
Granted, many poker players do not think of themselves as entrepreneurs, despite the long list of similarities. But when you really look at a winning poker player and a successful entrepreneur under the microscope, the two seem to have more in common than not.
We are going to look at two ways in which poker parallels business, drawing inspiration of Eric Ries’s seminal book The Lean Startup, which many modern businesspeople have read or at least heard of, particularly in the technology sector. The Lean Startup is considered by many to be the blueprint of how to succeed as a business in the digital age.
The Five Principles
The Lean Startup had five key principles, and it turns out poker is easy to adapt to each guideline.
1. Poker players are everywhere. In his book, Ries says, “The concept of entrepreneurship includes anyone who works within my definition of a startup: a human institution designed to create new products and services under conditions of extreme uncertainty.” Anyone can be a player. Just by sitting down at the table, you meet the basic qualification of success: showing up. To win at poker, the first step is always to show up at the table, day in and day out. That takes passion and dedication. If you don’t love the game enough to spend lots of time at the table, you are at what may be an insurmountable disadvantage.
2. Winning at poker is management. Your future growth depends on continuing to innovate your game. This requires constantly playing and experimenting, but also plenty of study and discussion away from the table. And then there is the matter of bankroll management. Sustainability in poker depends on managing your bankroll. Most people who go broke don’t do it by consistently losing, they go broke by consistently failing to manage their bankroll. You don’t just play poker, you manage your poker career.
3. Validated learning. This is a big one in poker and entrepreneurship. You are iterating a strategy. You need to validate the market’s need for your product or service, and change strategies based on the data at hand. Frequent experimentation creates innovation, and it needn’t be risking real chips at the table. An hour watching and learning from poker videos, analyzing hands or playing with Flopzilla or Equilab will do the trick.
4. Build stacks, measure progress, and learn. In poker, this process is far simpler than in entrepreneurship, where challenges lie on all sides. There isn’t much pivoting in poker, unless you consider adjusting from a TAG to a LAG a pivot. The game is the game, and there is only one way to measure progress: chips. You can always set more specific bankroll goals, and we would always recommend tracking your sessions for later anaysis.
5. Set goals and account for your mistakes. Even though the almighty dollar is the final measure of success in poker, you need more sophisticated ways to measure and analyze your play. Analysis software, tracking live play, using a HUD (even live) — all of these things and many more are the tools of a winning poker player.
Tools of the Successful Entrepreneur & Poker Player
It turns out that entrepreneurs and poker players use quite similar tools to succceed, even if they go by different names:
HUD/Analytics – Online poker players use a heads-up display (HUD) to constantly track the data collected on the play of their opponents. In live games, similar attention is paid to collecting data. Business is the same way — entrepreneurs use analytics to determine where their value is coming from, and where they might be losing it.
Goals – Winning poker players and entrepreneurs alike set SMART goals (specific, measurable, actionable, realistic, time-bound) for the best chance at success. Defining exactly what you want to do creates a feedback loop in your brain that actually helps accomplish the goals you set.
Network – It’s about who you know in poker and business. While there are always exceptions to the rule, you won’t get far in poker without poker pals to discuss strategy with, friends or backers to stake you for juicy games, and table buddies to make the grind time pass by easier.
Routines – Success is often about getting the most value out of every minute. Successful people of all types have routines that streamline their days and nights, and simplify decisions.
The classic example is the Steve Jobs turtleneck-and-jeans look. Far from an attempt at fashion icon status, Jobs simply chose to wear the same thing every day to avoid wasting time making decisions on what to wear, or what new clothes to purchase. Poker players are under far less time pressure (and many will usually wear whatever’s on the floor), but other routines like meditation, eating nutritiously, taking breaks, etc. go a long way toward winning.
Budget – In poker, the difference between a winner and loser often comes down to budgeting. The #1 downfall of poker players has historically been to squander winnings in other casino games, or by pursuing other forms of expensive entertainment. Winning poker players don’t just have good bankroll management skills. They also have good budgeting skills. Food, travel, transportation, hotels, tips, poker strategy books and sites… it all adds up quick. Like the profitable business, the profitable poker player stays on budget.
Mental Toughness – In business and in poker, you will get sucked out on. You will lose. So to succeed, you must learn to lose. You must learn how to learn from losing, how to feel no emotion when your opponent’s one-outer gets there on the river for stacks. With practice, it’s even possible to respond positively to adversity, by training your mind to see negativity as a learning experience. These and many other mental techniques are necessary to sustain a profitable career amidst the chaos of variance (or the market) over the long-term.
These are just a few of the myriad qualities poker players and entrepreneurs share. We imagine many of you may be a bit of both, but if not, we hope we’ve piqued your interest. Poker players make great entrepreneurs, and vice versa. If you’re on the path from business to poker, or if you’re ready to start treating your game seriously like a business, our PRO membership delivers massive return on investment. We had to mention it. We’re not just poker players, we’re entrepreneurs!