If you’re a fan of poker, then you’ll know how much strategy it requires. You also need to try and read the people around you and make decisions based on unforeseen situations. The same concept applies to business, and when you break it all down, you’ll soon see that the two are in fact very closely related. Want to find out more? Simply look below.
Be Aware of your Stack
When you play a game of poker, your strategy will be dictated by the amount of chips you have. If you don’t have many chips, then you may find that you are far pickier with cards and that you are much more aggressive with your general approach. If you end up waiting for the best cards to come along, then this may end up losing all of your money, with blinds slowly eating away at what you have. The same concept can be applied to your start-up as well. When you run a start-up, you’ll have a burn rate. Your blinds, your initial investments, funding and stacks all have a similar concept and when the clock is ticking, you have to make sure that you make the right decisions. When your runway is below 6 months, you’ll be in a push and fold zone. You can go all-in, or you can choose to fold. Everyone wants to have the perfect investor, so you have to make sure that you take all of the money you can. If you don’t, you’ll soon find that you are pushed to the sidelines, and eventually shut out of the game.
Have an Edge
Have you ever talked with an entrepreneur who happens to fail at everything they do, regardless of how hard they try? On the flip side, you may have come across an inept business owner who seems to always land on their feet. Success in poker, and success in business, really does depend on reading situations. You need to know if, and when you have the positive edge so that you can use it to your advantage. In the game of poker, this is known as game selection. It’s the art and science of being able to find a game that you know you are going to have an edge in. This will help you to maximize your odds of emerging as a winner. In the world of business, it’s the competitive advantage that you have over your competitors. It’s how you maximize success. At the end of the day, poker players and budding entrepreneurs have to try and recognize the competitive challenges that they have. You need to recognize that over time, the competitive balance will change as well. The positive edge you once had may well turn into a negative force if you do not use it well in the right situation.
Know your Limits
Bankroll management is fundamental if you are a poker player. Bankroll management essentially helps you to minimize the total risk that you face as it gives you the chance to pick the price for the game that you are playing. In other words, if you don’t win then you still have money to go and participate in another game. If you run a start-up you will know how hard this can be. You may find that you need to adopt the attitude of “faking it until you make it” and this can lead to some risky decisions. This could include hiring a superstar engineer, while you’re trying to raise money for your project. Big risks usually equal big rewards, but you have to remember that anything can go sideways, and if you do not constantly manage your risk then you may find that you end up being smothered by bad choices. One way for you to counter this in poker and business would be for you to ask yourself, how much are external factors impacting your decisions right now? What internal factors are influencing your bankroll? This will help you to know your limits and it will also help you to make the right choices not just for now, but for the future as well.
Calculate the Odds
You can’t manage what you do not measure. This is an old business adage, and it applies to poker and business. Calculating the odds and managing expectations are incredibly important. The best poker players in the world are rarely mathematical wizards. They rely on the lessons that they have learnt through playing millions of poker hands. They combine the non-verbal cues that they have picked up on when analyzing situations and they have also learnt from their experiences. This gives them the instinct they need to make situational decisions. Good entrepreneurs often rely on a “gut instinct” when they are making major decisions. They also use their marketing knowledge as well. Trusting instincts can be scary when you know that the stakes are high, but if you are able to calculate the odds and use your prior experience then this will help you to make masterful and faultless decisions.
Acknowledge and Accept
If you are a founder of a company, what do you do when you find that things are taking a turn for the worst? You acknowledge and accept it. This is otherwise known as a downswing. During this time, you need to make sure that you aren’t too harsh on yourself. You need to limit risky decisions and you also need to adopt a bit more of a conservative approach. Don’t throw in the towel, keep pushing and move on. In a game of poker, you would limit any bets that are not necessary, and you also need to make sure that you do not act recklessly to try and turn the odds in your favor. Getting lucky when running a start-up in the early days is easy, but doing it for years is hard. The same concept applies to poker, having one good game does not mean that you are going to emerge a winner next time. Having a bad game doesn’t mean that your future games will be bad either. It all comes down to acknowledgement and acceptance.
Learning to Read People
Finding certain patterns is key when you are playing poker. You need to look at the gestures of your opponent and you also need to take into account their attitude. How often are they betting? What size bets are they making? This will all help you to identify how they bluff, how they raise and more. Learning to read people in business is so important. You need to know when to push a sale, when to pull back and how to make sure that you hire the right team for the job. Learning to read people is a skill, one that translates very well from poker to the world of business.
The life of a professional poker player isn’t as glamorous as it may seem. You may see someone win thousands in a game and think, wow, that’s living the high life, right? This isn’t true at all. In fact, behind the curtain, you may find that the person who’s come away with the winning pot, has been forcing themselves to play 10 hours a day, with just a 5-minute break every hour. When you look at the world of business, you may see entrepreneurs with enterprises worth millions. That being said, you don’t know how much hard work and grafting they have had to do, to get to where they are right now. Discipline can make or break you as a poker player, and it can also make or break you as an entrepreneur. You have to be disciplined with your bankroll as well as your own routine. The best poker players and the best entrepreneurs are often somewhat religious about their mental health, physical fitness and sleep routines.
Be a Good Player
You have to make sure that you are a good player, and not just a lucky one. When you look at a professional poker player, you will soon see that they try and maximize their profit during an upswing, and they minimize it when there’s a downswing. Sometimes, your pocket aces may lose to another pocket aces. The same concept applies to business. You need to be good at what you do, and you need to know that even the best situations can come with a negative edge. If you want to capitalize on this, you have to recognize the potential of a scenario, before making decisions that give you a high potential for profit, and a low risk of loss. For example, if you have some pocket aces, you may be tempted to go all-in. If you have a solid business idea, you may be tempted to invest everything you have. There’s some degree of common sense in doing this, with both situations, but don’t risk everything you have if it means you losing out and not being able to further your journey should things take a turn. There’s not a poker hand or business idea in the world, that is worth risking more than what you have for.
Escape the Traps
Sunk costs in poker are essential for you to understand if you want to become a good poker player. The money you put into the pot is no longer yours and the decisions that you make going forward should reflect your hand right now, and not the investment that you have made. The dynamics of your poker hand can change in no time at all. You can go from being a favorite to being the person least likely to win in a matter of seconds. We live in very challenging times, and if you want to come out on top, then you have to make sure that you evaluate every aspect properly. You have to make sure that you are willing to fold any underperforming divisions. This has to be done irrespective of the amount of time, effort and even investment that you have devoted.
Get some clues on any potential investors, leads or press. Is there anything particular about how they act? How do they treat a waiter when you go out for a meal? Would you like to travel with them on a 10-hour flight? By asking yourself questions like this, you can be sure to make the best kind of decisions regarding who you work with. In poker, it’s so important that you analyze the people who are sitting right across from you, and the same concept applies in business too. The better you can read people, the better decisions you will make.
Don’t Stop Learning
Poker players and successful business owners often understand that they can never stop learning. They need to constantly be trying to improve so that they can achieve the best result. This is often done regardless of the achievements or the success that they have achieved in the past. In poker, players tend to read books and they talk about hands in groups too. As if that wasn’t enough, they also attend seminars so that they can drastically improve their game. Business leaders have to adopt the same approach. They have to have the same commitment to learning and they also need to participate in EO learning events too. They attend industry conferences, they sharpen their skills so that they can stay in line with their competition and they also push themselves when they don’t need to. It’s wise for you to adopt this approach if you want to become a good entrepreneur or poker player. This will help you to find new opportunities and it will also give you the chance to capitalize on them when required.
Controlling your Emotions
The thing that makes poker a really intensive game is the ups and downs. That being said, if you look closer at the game in general, you will soon see that players are often able to keep their cool. They don’t even flinch, because if they do, then they may give out clues as to what cards they have. Players often find themselves trying to hide their feelings because they don’t want to show that they are desperate or trailing. To deceive the opposition, some players also try and wear sunglasses, or they wear hoodies. The key lesson to take away here is that the players who are far more likely to be able to control their emotions often end up winning the game. This is true in the business world too. Great leaders are often known for being cool-headed and they are also collected. They do not make decisions that are based on their emotions, without calculating the risk, the reward and the general chances of success. This takes a lot of emotional discipline, but if you can master this concept then you will soon find that you are able to make much better decisions overall.
The ability to remain both calm and composed while you execute your strategy is absolutely essential. You need to make sure that you have a good amount of self-restraint, and you also need to have a good level of stoicism as well. Most of the cards dealt to a player will not be winning combinations. This can include a double Ace, King, Queen or Jack. That being said, the biggest pots are not generally won with these hands. You need to learn how to exercise patience so that you can focus on the goals that you have outlined. You also need to be confident, as this will help you to know that the winning strategy you have adopted will eventually turn into fruition. A successful business owner is usually very patient with their employees and clients. On top of this, they are patient with corporate partners and stakeholders too. They are patient enough to allow their strategy to play out even more if they know that their colleagues is wearing thin. The winning poker player is usually quite unphased by the amount of poor hands they receive. They are also patient enough to allow the strategy they have to play out. A lot of this comes down to confidence, but at the end of the day, it’s safe to say that patience is a crucial part of running a business, and it’s also a key part of winning poker.
Of course, when you break everything down, you will soon see that both poker and business have a lot of similarities. The two require a lot of patience, strategy and focus. You also need to work on perfecting your technique, while also being able to anticipate situations long before they happen. Playing poker can make you a much better business owner for this very reason. Interestingly enough, being a business owner can give you the valuable insight you need to become better at poker. With everything, practice and repetition is key, and if you are willing to put in the work then you will soon find that you are able to come out on top.