5 Ways Poker Will Help Product Managers Beat the Odds
Playing poker is often frowned upon as frivolous gambling. In reality, it can teach you invaluable lessons that will make you a better Product Manager.
I used to play a lot of poker in my twenties.
As with most my hobbies, I spent way more time researching it than actually engaging in it. I went down a rabbit hole of books, blogs, articles and videos about what makes a winning poker player.
I studied the ins and outs of Game Theory (math rules!) and the mechanics of predicting things in uncertainty. I was hoping this would allow me to chase bigger fish on the poker table and rake in the dollars.
Turns out, I learned a ton of lessons that have proven to be way more valuable than the chump change I ended up making from my time grinding away at cards. They actually made me better at product and business.
1. Know When to Hold’em, Know When to Fold’em
Ok, I learned this from Kenny Rogers first, but a critical thing to know about poker is that it’s pretty damn boring. Contrary to what the televised version might lead you to think, poker is a whole hold lot of folding, some more folding aaaaand even more folding.
You spend way more than you’d think just getting two cards, looking at them, tossing them back, and watching others play. Over and over again.
The worst thing is, in addition to folding obvious dud hands, you need to learn to fold even when things look kind of promising.
This is what an expert product person also does.
Just because an idea or an opportunity seems super promising or a feature is an “absolute must-have”, it’s our job to shoot that stuff down to protect the ability of our teams to focus.
We employ the Socratic Method to make sure we don’t accidentally commit to a weak hand or a losing feature. We question everything.
A great product person should be folding a whole lot.
A bad one will be running around chasing shiny things, completely ruining their team’s ability to deliver their highest possible value and impact.
2. Never Fall in Love With a Hand
You got dealt pocket aces and hit trips on the flop? NICE! Time to go at it HARD.
Of course you could’ve paid attention to the two suited cards in the flop and the wild player that wasn’t deterred by your high bet, and ended up getting a flush on the turn. Especially once they started betting big after.
But nope. You had been waiting for that strong hand for an hour and were getting really bored, so it’s all or nothing time. Or to be more exact… it’s nothing time.
Poker is a lot like Agile: every single thing you observe and every single card that falls on the table is an opportunity to learn and re-evaluate your situation. Every move your opponents make can indicate that the really strong hand you’re holding is actually absolute garbage that should be tossed immediately.
Have you ever embarked on a “really simple” initiative that suddenly hits a massive roadblock due to a newly discovered tech restriction or a customer research discovery? Chances are, you still pushed through the project even if it became clear that the ROI just bottomed out.
Sometimes you just need to drop a good hand. It’ll be worth it when it’s starting to seem like your opponent has a great hand.
Also, always remember this…
3. Trusting in Probability Overcoming Volatility in the Long Run
Really understanding probabilities is hard.
When people wrote Trump’s chances off when he was given 20% odds, I shuddered. That’s better odds than tossing a single D6 die and getting 6! That happens all the time. Or to be more specific, one sixth of the time.
On the other hand, I can beat any single master poker player in a single hand. The odds are pretty close to 50/50. Heck, I could even win a WSOP tournament in one isolated occasion. The odds would just be significantly worse.
That doesn’t mean I’m a better player than these people nor does it mean that poker is a game of luck in the long run.
It just means that probability needs volume to overcome short term volatility. I will never walk away with my money from a poker master over a long-enough series of hands.
In product, nothing exemplifies this better than the way Scrum does roadmaps and dates. It’s based on this simple thesis:
Humans suck at estimating complex work. They just suck at it remarkably consistently.
Here’s how you leverage this wisdom to predict the future with your delivery dates:
The problem is that for the magic to start working, it requires tenacity and consistency. This won’t exist unless people who understands the long term distribution of volatile values. People can be easily led to think that just because any single SP estimate might go horribly off the mark in isolated incidents, in a long enough series, they start trending towards the mean.
…and before you know it, you’ve got accurate delivery projections based on abstract data.
4. ROI, ROI, ROI
99% of poker is just obsessing over the return-on-investment of a move in an environment where you don’t really really know how the reward will actually shape out.
The simplest case is that you have a 1-in-6 chance to hit a winning hand on the last card but you’re being asked to contribute 1/8 of the potential winning pot to stay in.
That’s a positive return-on-investment and you should absolutely go for it.
The same even simpler is if I offer you $1 if you correctly guess heads or tails on a coin flip, but expect you to pay $2 if you guess wrong. Hopefully you’ll know better than to take that bet as it’s a bad one for you.
Product should be pretty much the same game: how much are we investing? What’s the expected benefit? Is it worth it?
Ok, that’s easy to decipher in a perfect scenario. What if both the investment and the return are somewhat moving targets?
As noted in #2 above, you need to be comfortable mapping out the different scenarios in your head when playing poker. Chances are that you’re “drawing dead”, meaning that without realizing it, that 1-to-6 chance is actually the chance to hit the second best hand. You also need to understand that just because you paid that 1/8 of the pot, something might still happen that will require you to contribute a whole lot more. In poker, if you’re not first, you’re last.
In product, it wouldn’t be unheard of to be building something with little to no actual value, just because somebody — leadership, product, design etc. — has fallen in love with it.
Or in some cases, to make a bet, you may need to add future benefits into the calculation to make sense of the investment. In poker, that’s called implied odds. In product, there are plenty of scenarios where we’re building out features that might not have any direct return, but they unlock big things in the future.
It gets complicated, but after you’ve played poker and studied Game Theory, you start evaluating every move you make based on its ROI.
Poker also teaches you painfully well that there’s nothing worse than considering sunk costs when evaluating ROI.
5. Right Behaviors > Desired Outcomes
To be a great poker player, you need to be brutally focused on playing a winning game, not on winning hands.
If you always do the right thing, over a long enough period of time, you will be rewarded. You will lose hands, you will lose money and sometimes you will even lose face. Even worse, you’ll be bored out of your skull as you pull out of big hands while your adrenalin kicks in and the thrill junkie in you is egging you on.
But if you’ve got 1:7.1 odds at winning and the pot is giving you a 1:7 return, it’s a dumb move in the long run to stay in. Even if you “have a feeling” about this particular hand.
This is really hard to grasp in business where you’re always expected to snatch victory from the jaws of defeat and as things get sticky, pull off some magic tricks, like having 9 women deliver a baby in 1 month.
We often end up idolizing horribly dysfunctional teams with bad practices just because they happened to stumble upon success.
But just like a skilled player in poker, teams operating with good processes, good organization, and great culture sometimes succeed and sometimes fail. Their chances of sustainable triumph are just far superior in the long run than those just chasing the outcomes.
So, always focus on building great teams with great practices rather than their immediate output. I can guarantee the long term return is much better.
BONUS: Balance of Qual & Quant
A good poker player is good at reading other players emotions or mastering playing “by the book” by counting exact odds of every scenario.
A great poker player balances both of these.
A good PM will be adept at talking to users and feeling their pain or making dashboards of data dance at their fingertips with a wave of their SQL or Tableau wand.
A great PM balances both of these.
In both, having superior emotional intellect, the ability to read human and a strong gut instinct balanced with the ability to see insight in masses of raw data is what separates you from the crowd.
You can do ok with just one. But for the best, “ok” is nowhere near good enough.
This is but the tip of the iceberg. I can heartily recommend Game Theory as a topic of study for all product people. While I don’t directly recommend gambling, especially if you’re the addicting type, an occasional tournament of poker with friends is a ton of fun and can drive home some of these points. Please let me know in the comments below if you’ve got other interesting take-aways from poker and product. I’d love to hear them.
If this got you excited, I’d recommend reading one of these books:
Doyle Brunson: Super System 2
David Sklansky: The Theory of Poker
Both are wonderful primers to the world of poker and Game Theory.
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