Everywhere you turn these days, you see poker. There are poker tournaments throughout the world, poker on ESPN, poker online, poker books galore, and poker articles in numerous major publications.
And there are great stories from the World Series of Poker. In the 2005 main event, a former chiropractor from Australia beat out 5,619 people and won $7.5 million. In the 2004 tournament, Greg Raymer, an amateur and lawyer, won the event and $5 million. In 2003, a total unknown who had never played in a live tournament won the tournament and $2.5 million (the best part was his name — Chris Moneymaker, which is his real name).
No other sport (and, yes, I know some people would scoff at the idea of poker being a “sport”) allows an amateur to participate and have a meaningful chance of winning. Could you beat Tiger Woods at golf? LeBron James at basketball? No way. But in poker any amateur with some experience has a legitimate shot at winning a big tournament.
I find that poker can provide a number of lessons to entrepreneurs and startup businesses. Poker players have an abundance of catchy phrases, so let me set forth some of those phrases or principles and apply them to the startup world.
“Trust Everyone, But Cut the Cards.”
This is a poker adage that says there is nothing wrong with trusting other people, but make sure you protect yourself by cutting the cards. In business, there is nothing wrong with being cordial and trusting, but make sure that you are protected by appropriate contracts and deal terms.
“If You Can’t Spot the Sucker at the Poker Table, Then It’s You.”
An important element of being a great poker player is being able to read other people. Are they constant bluffers? Do they have some kind of “tell” that tips off other players whether they have a strong hand or not? As Chris Moneymaker said, “The beautiful thing about poker is that everybody thinks they can play.”
In business, you should constantly observe the people with whom you do business. Know what is important to the other side. Listen more than talk. And don’t ever underestimate the opposition.
“You’ve Got to Know When to Hold ’Em, Know When to Fold ’Em.”
This phrase is often said either by a Kenny Rogers fan or a poker player who has no clue as to whether he should continue playing his hand or fold. In negotiations, you have to know when to keep pushing on a point, and when to give up and move on. Fighting every point won’t get you to a final deal unless you have tremendous leverage. Knowing what leverage you indeed have is crucial, but constantly assess how important any particular point is if it threatens closing the deal.
“I’d Rather be Lucky Than Good.”
This phrase is typically uttered by someone who is neither lucky nor good. In the long run, when all the luck is bled out of the equation, it’s skill that separates winning players from losing players. In business, you have to know what you are doing; you have to provide real value and you have to be reasonably priced — and then luck may follow. I’d like to share a few of my favorite “luck” quotes.
- “Poker is a combination of luck and skill. People think mastering the skill part is hard but they’re wrong. The trick to poker is mastering the luck.” (Jesse May)
- “In the long run, there is no luck in poker, but the short run is longer than most people know.” (Rick Bennet)
- “People would be surprised to know how much I learned about prayer from playing poker.” (Mary Austin)
“I’m All In.”
This refers to a player betting all of the money in front of him on his current hand. Many times, the bettor does not have the best hand; he may be bluffing, he may be on a good draw, or he may be only second-best. In the business world, you should bet all of your chips only when you are objectively supremely favored to win the bet. After all, losing an all-in bet in business can have devastating consequences.