Five Business Lessons from Poker
They say that experience is life’s greatest teacher, but poker has plenty to teach us as well. If you’re just joining in, over the last week or two I’ve been blogging through Delivering Happiness, the story of Tony Hsieh and Zappos. The third chapter, “Diversify,” chronicles the time between LinkExchange and Zappos when Hsieh starts investing in a diverse portfolio of new companies. During this period he also developed an interest in poker.
Unlike other casino games which pit you against the house with terrible odds, in poker you’re only up against other players and can leverage probability to maximize your chances of winning. The player who best uses their knowledge of the deck can determine the statistically advantageous play in any given circumstance.
In the third chapter, Hsieh condenses everything he learned playing poker and applies those lessons to marketing, branding, financials, strategy, culture, and learning. This chapter is worth the price of the book! Let me share a few of his observations:
1. “It’s okay to switch tables if you discover it’s too hard to win at your table.”
One of the keys to poker success takes place before the cards are dealt — first you have to determine where you’re gonna sit! You’ll increase or decrease your chances of winning depending on whether you’re playing with other pros or nine beginners. And here’s the thing, if you start losing, it’s alright to change tables! The same applies to business. Maybe the field is so saturated that it’s hard for your brand voice to be heard? Maybe you’re struggling to deliver value with your current product? These could be hurdles you’re able to leap over, but it also might be worth considering whether you need to switch tables.
2. “The guy who never loses a hand is not the guy who makes the most money in the long run.”
You’d think that successful business is about winning all of the time. The reality is that sometimes you have to lose in order to win. This might mean a refund even if it’s not your fault. It might mean a short term loss to set yourself up for financial success down the road. You’ll find it freeing in life and business if you can break out of the mindset that success is equivalent to always winning.
3. “Educate yourself. Read books and learn from others who have done it before.”
Hsieh’s knowledge of poker didn’t come through a magical infusion of knowledge. It came through reading, learning, and soaking up everything he could from others. Pride says, “I don’t need anyone’s help to solve this problem.” Humility is admitting that there is always more to learn. Some might stumble upon a business goldmine, but for most it’ll take hard work and effort. In the words of Edna Mode, “Luck favors the prepared.”
4. “Don’t cheat. Cheaters never win in the long run.”
This simple fact is easy to forget in the moment. Business is ripe with opportunities to make a quick buck at the expense of your customers or your staff. If you’re always working to do right you’ll avoid trouble down the road. This takes intentionality, but playing honestly pays off in the end.
5. “Be nice and make friends. It’s a small community.”
It didn’t take long for Hsieh to realize that much of the fun with poker exists in the relationships, not the cards. It’s easy to get so lost in the nuts and bolts of business that you forget about building relationships. Hsieh goes on to describe how many breakthroughs came through brief friendships that paid off big down the road. It’s great to focus on your business, but don’t forget to make friends and build connections as you go.
Just like poker, there are lots of seemingly unrelated hobbies that can influence our approach to life and work. A little reflection can go a long way in helping us syngerize our side interests with our business goals. Part of Hsieh’s success can be attributed to thinking deeply about how every part of his life connected with his professional aspirations. I’d love to be a better model of that myself.