Business Lessons Aspiring Entrepreneurs Can Learn From Poker
For most people, poker is synonymous with fun, entertainment, and excitement. But if you look more closely, the game can actually be a professional pursuit that can teach invaluable lessons — in life and in business. In fact, some of the world’s leading entrepreneurs play poker. David Einhorn, founder of Greenlight Capital, is not just a billionaire hedge fund manager. A regular attendee at WSOP events, he is also a skilled poker player with more than $5 million in winnings donated to charity.
If you’re looking to follow in his footsteps, know that there are several kinds of poker you can try out. Texas Hold’em, for instance, has been the most popular variant of the game since the turn of the millennium, thanks to its straightforward rules and exposure on television. Omaha, meanwhile, is a close second, with a similar set of rules. The only difference is Texas Hold’em provides players two hole cards, while Omaha deals four hole cards. Also, to make the best hand in Omaha, you have to use exactly two hold cards and three community cards.
But however you choose to play, poker has plenty to teach you in the world of business. Here, we list down lessons you can apply in your daily choices as an aspiring entrepreneur.
Use information to your advantage
A good game of poker requires players to have a grasp of what is going on around them. Being observant and understanding the data surrounding the opponents’ decisions can help in winning. If players can interpret how their opponents bet and act based on previous performances, they can adjust and change their strategy in real time. On the other hand, if players also know how they are perceived by their opponents, they can use that to their advantage, too.
Similarly, in putting up a business, you must first know who your competitors are. In doing so, you gain knowledge on what is already existing in the market, and you can offer something new that solves a previously unaddressed need. As you build your reputation, you then gain more customers, and over time, as more competitors pop up, you continuously gather information to help improve your business.
Take calculated risks
“Know when to hold them, and know when to fold them” is a poker cliché everyone uses — and for good reason. Playing poker develops your risk-taking skills. Primarily, you have to know what makes your hand great and when to play your cards when the opportunity arises. The best players know how to plan in advance and when to take calculated risks, and these often lead to victory.
Likewise, establishing your own business is already a big risk. But the risks do not end there. Apart from envisioning long-term success, you have to deal with short-term risks on a daily basis. Those range from the small decisions like restocking supplies to the tougher ones, like taking out loans. What move do you make, then, that will ensure both immediate and long-term benefit?
Have a contingency plan
If there is something poker and business both share, it’s unpredictability. Both are games of taking risks and getting returns, but poker can teach players on a relatively smaller scale how to plan for “what ifs”. Good poker players have a contingency plan in case what they are expecting and hoping for fails to happen. They always have a means of getting them out of trouble.
Meanwhile, in business, losses are inevitable. This is especially true when you are putting up a small business that is still unknown to customers. In fact, Fundera learned that almost 20% of small businesses fail in just their very first year. Although losing your capital is probably the last thing on your mind, it would not hurt to have a course of action should the worst happen. At least, you are prepared for anything.
Before becoming successful, poker players had to start somewhere. Some had to grab opportunities for free trials, while others had to play online first before going to brick-and-mortar casinos. Whichever path they took, they had to spend hours practicing in order to get the level of experience and success they are enjoying now.
In parallel, entrepreneurs succeed because of their hard work and dedication. Anyone can craft a business proposal, but to get it off the ground successfully is a feat enjoyed only by a few. While you can pursue further studies in business, no amount of memorized facts can ever amount to the value of experience. As clichéd as it sounds, experience truly is the best teacher.
Only the strong-willed can survive the vicious worlds of business and poker. Just a single misstep can ruin years’ worth of preparation and hard work. That is why remembering these takeaways from playing poker can greatly impact your plans of running a business. But above everything else, you should remember to always take accountability for your actions, may that be a disappointing loss or a glorious victory.
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