Know when to hold ’em, know when to fold ’em: How business is like poker

I love poker. If I was ever going to give up writing, it would be to do just one thing: Be a professional poker player. I’ve read the books. I watch any poker game being aired. I have a room in my house that will (very shortly, but not soon enough) contain a poker table. If you can’t find me at the computer, you’ll find me at my poker table.

My grandfather taught me to play when I was very young. In grade school, my mom ran a sort-of after-school babysitting service and I taught the other kids how to play and we’d play with Monopoly money. In college, and shortly after, I had a regular Wednesday night game. I still get to play on occasion but I never get to play as much as I’d like to.

Recently, I took a gamble on a new client and it paid off, which made me think about the relationship between poker and business. Here are some business observations inspired from poker play:

  • You are dealt a hand of talent. Some people are dealt better hands than others; just do the best you can with what you’ve got.
  • Realize that you can’t play every hand out there. You’ve got to pick and choose which one to play by sizing up the competition each and every time. Some people with better hands will beat you. Other people with better hands will make bad plays. Some will bluff and lose.
  • The hand you’re dealt is only part of the cards in play. Remember that the flop (the cards on the table that everyone sees) could change everything.
  • It’s okay to bluff once in a while. Don’t bluff all the time. And, if someone calls your bluff, be prepared for the consequences. But sometimes a little bluffing is necessary. In the business world, the term is: “Fake it ’til you make it.”
  • You have to play if you want a chance to win. I meet a lot of people who want to be entrepreneurs. They have some talent to get into the game but they lack the courage to make a bet. If you want to win you have to play and you have to be prepared to lose.
  • There is some give-and-take. It’s not all about income; you need to pay out some money (the ante, the bets, the raises) to make money.
  • The best players play a strong, aggressive game when they have a good hand and they get out fast when they have a bad hand. On the other hand, weaker players (and the entrepreneurs who will eventually tank their business) are the ones who will play through every hand even if they know they can’t win it.
  • Every hand is a gamble. It’s a risk and a single hand can swing the entire game.

So, how can you be a better business owner? By becoming a better poker player. Here is my advice:

  1. Get in the game. Stop sitting on the sidelines and watching. You might lose sometimes, and make sure you learn something every time you lose, but you might win some, too. And the longer you’re in the game, the better you’ll get.
  2. Think clearly and carefully about the hand you’re dealt. Does it have a chance to win in this round? If not, get out.
  3. Learn to take smart risks. Figure out what a smart risk is for you (how much are you willing to lose? How much do you want to win?) and make those plays.
  4. Learn everything you can about your opponents. Learn their strengths and avoid them. Learn their weaknesses and exploit them

Poker and business are very similar: They’re studies in money-making through opponent evaluation and risk acceptance. I love writing and I love the “game” of business.

How do you play?

[Photo credit: chrischappelear]

Published by Aaron Hoos

Aaron Hoos is a writer, strategist, and investor who builds and optimizes profitable sales funnels. He is the author of The Sales Funnel Bible and other books.

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