In order to draw a parallel line between poker and entrepreneurship, I would talk about the key traits that a successful poker player and a successful entrepreneur shares. That includes the appetite for risk, knowledge and crisp observational skills.
A lot of businessmen around the world are experts in Poker too. Scott Redler, Chief Strategic Officer of T3, Peter Muller, founder of Morgan Stanley’s Process Driven Trading Group and David Sacks, founder of Yammer are notable names.
Here are 10 interesting analogies on how entrepreneurship is like poker.
Continuous Risk Evaluation
Poker is not gambling. You cannot just place a bet and pray to God to make the day your lucky day. Instead, poker is more like a game of skills. Or I must say a game of extraordinary skills. You have to evaluate the risks before placing bets.
Similarly, in entrepreneurship, you have to evaluate risks. You cannot just place bets on something you don’t know the risk about. You have to invest wisely after analyzing the risks using several data points. A diligent entrepreneur is someone who understands the risk on the table.
Lack of Perfect Information
In poker, you have to place bets without knowing the hands of your opponents. While playing, you get a lot of new information about other players and analyze them to continuously evaluate the risk and make predictions. You have to constantly update your strategies according to the information you receive while in the game.
Similarly, in entrepreneurship, you cannot get complete information in the beginning. While you are doing business you get access to information about your market, competitor and customers. You have to utilize the information to draw meaningful conclusions and constantly update your strategies to become successful.
The Luck Factor
Poker is a game of skill and a game of luck too. There are times when you calculate the odds very accurately, gather as much information as you can and struggle hard to win a game but end up losing your money. Luck plays its part. There are a lot of losers and very few winners in poker.
Similarly, luck plays an important role in entrepreneurship. You research the market well, you have your finances ready, you plan every day of your company and still, your startup fails. Luck, randomness and the right timing plays a significant role in an entrepreneur’s success.
A successful poker player is who can evaluate the risk, takes the bet at the correct time and calls the shots. This is the secret sauce to win in the poker world. Yes! It requires you to be lucky but you cannot win every bet just with luck. No one is that lucky.
Similarly, a successful entrepreneur is a secret sauce; the sauce of risk evaluation, belief, hard work and discipline. Without the mixture of these qualities, you will fail.
Will Power and Discipline
Playing poker takes a strong willpower and discipline. You have to sit for hours with poor cards and lack of opportunities with a constant temptation to bet all your money. You have to play regularly and carefully to become a successful poker player.
Similarly, in entrepreneurship, a lot of people quit because they lack the discipline and patience to stick to the plan. Many try to take shortcuts to get rich quick and fail. Majority of companies require time, consistency and discipline to grow and become successful.
Control over Emotions
When playing poker, you might get an uncontrollable urge to bet more and more. This urge is derived by your opponent’s large bets, or you hearing about someone betting large sums of money. Another strong emotion may arise when you lose your hard earned money.
Similarly, in entrepreneurship, you might get an uncontrollable urge to bet all your money on a product that your competitor has launched and is getting a good response to. However, this may lead to disaster as your business has its own strong points and the product may not be a part of it.
Professional poker players very clearly know that they will not win every hand every day. That is statistically impossible. They are prepared to lose money some days and recover their losses the other days. The factor that determines your success as a poker player is whether you know the economics to lose smaller money for some days and bounce back to recover your money with profits some day.
Similarly, in entrepreneurship, you should understand that you may have to incur losses for some time and then bounce back to recover all your losses and make a profit.
Practice Makes a You Perfect
If you are a newbie and playing online poker for the first time, you cannot win every game. Neither can you turn into a professional poker player overnight. However, startups like Uma Poker has made it easy for a newbie to play poker online by innovating the user interface and the simplifying the ease of use.
Similarly, entrepreneurship is nothing different than poker. A successful entrepreneur takes years of innovation, practice and experience to make. You have to interact with customer, employees and learn about your competitors to build a successful company.
Testing Your Strategies
If you are a poker player, you have to thrive off information. Professional poker players don’t just bet large sums of money. Instead, they strategically risk smaller chunks of cash to find out the opponent’s playing strategies.
Similarly, successful entrepreneurs know that it is impossible to exactly predict consumer’s behaviour. So they test out a new product on a very small test group and find opportunities accordingly. As an entrepreneur, you cannot bet all your cash into a product in a go.
Know When to Walk Away
Professional poker players don’t bet on every hand. And they know very well when not to bet. The art of saying “NO” is the key to poker success. Successful poker players know when to leave the table and walk away.
Similarly, as an entrepreneur, you have to know when to walk away. You might get offers from investors or offers from some other firms that might seem tempting at first. But, you have to learn to say “NO”. You should know when to walk away from a deal.