Run Your Startup Like a Poker Pro
5 Comments
The best poker players are great at thinking on the margin. They completely forget about pocket Jacks when the flop is Ace, King, Queen (though it wouldn’t take a pro to lay down that hand).
You should have the same mindset about your startup. You should be getting your money in when the odds are in your favor and check or fold when they aren’t.
Bad card players chase. They get behind and start to make bad decisions hoping to recoup their losses. This same behavior can be seen in entrepreneurs and it’s completely understandable – they’ve put their lives and passion into a vision.
If you want to be a great entrepreneur though, you’ll have to learn to think like the pros. Remember, you make money by playing well over many hands, not by throwing all of your chips in on a risky bet.
Interesting analogy, KV, and a good point about being level-headed. There are certainly some similarities between entrepreneurship and gambling, but I’ll make one really important distinction: gambling is (almost) all about chance (I know ... I know ... you can be “good” at poker).
When you’re running a start-up, though, you’re largely in control, and in control of a lot more variables that you can adjust to try to make things successful. There’s still a right time to quit and try the next one, but I admire a entrepreneur that keeps plugging away at a vision until it works—even when the going gets really tough—a lot more than I do a poker player who blows his savings at the table in one night.
Knowing when to thrown in the towel is a tricky one. I have been developing a ‘startup’ for seven years now. I have poured thousands into it - and although we have some good customers now - I often consider when it might be time to thrown in the towel. There have been some dark days as along the road and it can be hard to see when it really does make sense to jack it all in.
On the one hand I’m a big fan of Keith Cunningham who professes “it is not what you do - but how well”. If you are the best in your sphere you should find some success.
So how have I made my decision?
By developing options. Luckily - the big difference between poker and building a business is - in poker - you only get one hand. In the real world you can get a few extra. Consider what you’ve learned - how your competitors have been successful (or not) and look for inspiration outside of your own ‘sphere’. I’ve found it personally extremely helpful to break out of my narrow network of contacts (which were all telecom and techie) and into broader groups. By comparing with others you get a great insight into you really are on a hiding to nothing or onto something truely great - if you can just work hard enough to achieve it.
Brian, I agree that gambling in the Vegas sense is obviously more about luck than starting a business. But I contend that all successful sites had at least one time where the ball bounced their way. Failed startups on the other hand, are more likely a cause of bad decision making. Which gets to my original point, that by staying level-headed and focusing on the margin, you won’t get roped into bad decisions (i.e. spending the rest of your capital on a Super Bowl ad) trying to make up for sunk costs.
James, great point about gaining perspective from people outside your specific industry. As far as your startup, I don’t think you ever necessarily need to throw in the towel. As long as you’re continually adapting to the changing business climate, there’s always a chance of future success.
I play poker for fun and I recently realized you can profit from it. You just have to have self control. Knowing when to fold. You can play 20 games and fold every time and then hit a jackpot.
As for business...I started my own web development company and for now I don’t risk to much. I will though when the situation will feel right and when I’ll have some backup in chance I don’t make it.
Great analogy here. I play poker a lot and see where you’re coming from.
I find skills that you learn in poker can be applied to the real world in so many different ways. Good post!
Next entry: Mixing a Clear Vision with Agility
Previous entry: An Agile Approach to Content Saves Stress (and Money!)
Recent Comments