Unlike Golf, there is no handicap in poker. Handicap helps “level” the playing field so that people like me can play against Tiger Woods, and maybe win when you factor in my handicap. In poker, and in business, everyone is essentially equal with only skill and sometimes a little luck determining who the winners and losers are.
The similarities between poker and business are more significant than most people realize. Both involve strategy in which luck, reading your opponents/competitors/customers, and other factors play a role.
Let’s look at some of my experiences in poker and how they can be applied to running a successful business.
You cannot pursue entrepreneurship or poker without learning the basics. In terms of poker, you should first familiarize yourself with its rules and how it is played. While the advanced strategy will come later on, until you understand the game and its rules, you will never be able to win any tournaments.
As you know, becoming an entrepreneur isn’t an easy process, either. Nowadays, you can take dozens of online courses in a year or two to teach you everything you need to know without taking a break from work. So, no matter if you are a natural businessman or a future poker champion, you cannot win or be successful unless you spend the time researching and studying to learn the basics.
The fastest way to lose all your money is by not managing your bankroll well or playing with more than you can afford. Many poker players have to discover this on their own. Fortunately, poker will help you prepare for different situations in life and business by teaching you to manage your bankroll, and that cash is king.
You will learn the fundamental principles by planning and efficiently distributing your funds and even taking on necessary risks. Doing this well will help you manage your business funds properly.
Since poker is a card game played both with and against other people, it requires understanding your opponents’ motivations and reasoning. In certain ways, poker does imitate life, and it teaches you to identify emotions such as excitement, fear, and anxiety, among others.
This may be a beneficial skill for those in sales or other negotiation roles. People with a solid understanding of poker psychology are experts in observing other players. Using this information, they can predict what their opponents might do. One of the most accessible layers of poker psychology is watching what your opponents do when they look at or touch their cards.
It is a valuable skill to recognize emotions in your business life when making decisions about customers, competitors, and employees you don’t know very well.
Another skill that ties perfectly to this one and can be learned through playing poker is predicting what others might do. But here, intuition is key. Over time you build up intuition from all the experience you gain while playing. Undoubtedly, this skill is hard to master, but it is one of the most rewarding, so you should devote your time to it. Intuition, though, is just the culmination of concluding on various pieces of information received – so gathering information is paramount in being successful.
Whether you are playing poker or doing business, it is crucial to have a strategy if you plan to succeed. Knowing how to differentiate between luck and skill matters greatly for your strategy. It is possible to prepare for many things, but knowing when skill pays off and when luck is involved will allow you to determine when to take risks and when not to.
With an effective strategy, you can succeed in both business and poker. Furthermore, you should also be prepared to adapt and minimize your losses. The most important rule in any business or game of poker is always to have a plan B. However, sometimes no plans work, so dynamic decision-making is necessary. Prepare for those situations in poker and business — experience with either one will teach you more about this.
In poker, you attempt to estimate the outcome of certain actions based on the available information – this is expressed as a percentage of success. You have probably heard poker players or TV commentators say “oh that’s a bad beat.” A bad beat is defined by making the right decision but still losing. For example, if you had a 90% chance of winning you win 90% of the time, but lose 10% of the time. This is just how statistics work, but in poker this would be called a bad beat.
In business, if you made 10 sales calls, and secure 9 orders but were rejected 1 time, you would undoubtedly be super happy – focusing on the 9 wins and not the 1 loss.
The learning point here is to try to assess the likely outcome and make decisions based on the probability of success of that outcome. In business, we can get bad beats – like COVID for example – but does that mean our initial decision was wrong given our assessment?
Life is often like poker in that you don’t get to choose your cards, and sometimes you have to make the best of a bad situation. You will not always get the hand you’re hoping for in poker, and you’ll have to find the best possible solution with a mediocre hand. This means you need to learn when to play a hand, when to take risks, and when to fold and simply wait to act with better cards.
Business owners who possess this kind of insight can make sound decisions about using assets and when to let go of projects that aren’t delivering results. When starting your own business, you will invest two resources — time and money. In the beginning, you may need to use one of these assets more than the other. Being realistic about the asset you’re working with will help you utilize it more effectively.
By not accepting bad things and not trying to change them, you’ll look for creative ways to overcome situations, professionally or personally. Taking charge and making your stand is beneficial in many areas of life.
Managing risk is a large part of the poker game. The key is to figure out what makes your hands great and when you should trade some cards for others. The best poker players understand the relationship between risk and reward, so they often take calculated risks, depending on their cards and what they believe other players have in their hands.
Business is no different. There will be times when you will not be able to control everything that happens in your enterprise. Still, you need to be able to analyze situations and opportunities and decide when it makes sense to continue playing and when you should move on.
Managing your risk well enough to create space for a big opportunity will give you an edge in the long run and be very beneficial to your business.
When conditions change, poker players need to adjust their strategies. Just a single new card could change everything. Likewise, to succeed in business, you must be adaptable.
It is not uncommon for poker players to change their strategies throughout a game. You, too, need to be open to making changes if you want your business to be successful in the long run. A smart poker player realizes that when something isn’t working, it’s time to change it.
As an entrepreneur, you’ll have to modify things from time to time. You need to be willing to adapt your strategy as your business changes because what worked two years ago might not work this year.
In addition, you must also understand that short-term thinking is unlikely to lead to long-term success. Sometimes, patience is required to achieve the results you wish for. And, of course, fortune is always a significant factor.
Sometimes, you will fall behind because of someone else’s better hand despite having made the right decision based on your hand. However, you shouldn’t be discouraged. Instead, you should be willing to change your thinking and give it another shot.
It is also essential to acquire knowledge along the way. Although luck can contribute, you should also be prepared. Understanding the game, observing it, developing a strategy, and taking action all contribute to becoming a world-class poker player. Mastering these traits will also help you succeed as an entrepreneur.
Key to both is to Plan – Execute – Monitor – Repeat.
Playing poker puts you under constant pressure. Each decision you make during a game can result in significant consequences, and taking a break is out of the question. Even though this is hard and exhausting, it will help you learn to handle high-pressure situations.
Additionally, entrepreneurs often launch startups with the hope of achieving quick success. You simply cannot foresee everything, so you will inevitably run into problems, and your job is to solve them as best you can. Many people fail here because very few of us can handle stress, but poker certainly prepares you for this. Usually, the ones who succeed in all fields are those who have patience and persistence.
Hope that in business, like poker, you win more that you lose.
If you are ever on Poker Stars, where I play recreationally and not regularly, look me up – I play under the username TLB1804.
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