Business is like a game of Poker

I love business and I love tournament poker.

I also find there are a lot of similarities between the two.

In tournament poker, the key objective is to be the last player left in the tournament. If you can do this, you tend to win a large prize relative to your initial ‘buy-in’ to play in the competition.

In business, we all start with finite resources.  The key goal is often to be financially comfortable and make a lot more money than our initial investment.

In tournament poker, we have to ‘grind up’ a stack of chips. We start we the same amount of chips as everyone else in the tournament but with some good play and some luck (poker is part skill, part luck) we can build our chip stack. More chips mean more chance of making the final table and winning the big prize.

In business, we hustle day to day to get sales, reduce costs and get profits up. This leads to adding cash (chips?!) to our business bank account. The more we accumulate this cash through our business skills and luck, the better chance we have of being secure and making some good income from our business (winning the big prize!).

In tournament poker, there are certain fundamentals that all good players understand. One of these, is ‘playing in position’. It means that more information is available when it’s our move...we are the last to act during the hand. At this stage of a hand, we can raise, check or fold, based on knowing a lot more information than other players who were in the hand earlier.

In business, there are also key fundamentals that all good entrepreneurs understand. Some of these, are how and when to close the deal, when to make the purchase, when to employ or when to change direction. It’s important to ‘play in position’ and make the right move, at the right time, to give us the best chance of success.

In tournament poker, there is a saying called ‘a chip and a chair’. It’s meaning is that until the last chip is gone, there is still a chance of succeeding in the tournament. Even if you are down to your last resource (1 chip)....there is still a chance. As someone who has played the game for many years, I can tell you I have been in this situation several times and not only went on to cash a win in the tournament but also win the whole thing! From 1 chip! 

Entrepreneurs need to be resourceful like this, especially when things aren’t going well.  Stay in the game!  Keep turning up, day after day.  The tide often turns with consistency of effort.

In business, it’s important to protect ‘your stack of chips’ or your ‘resources’. Ensure you don’t get down to that last chip. Recognize your assets, your intellectual property, the business insurance you require to protect things, where your value lies in the business and try to keep improving your position.

However, if hard times hit and you are starting to measure your limited resources, with very little hope available... remember it’s not over till it’s over....heart, fight, business skills and some dumb luck...can still win the day!

In tournament poker, there are two key aspects relative to your chip stack. One is trying to GROW your chip stack. Another is trying to PRESERVE your chip stack. It was a number of years into playing the game before I realized the importance of this aspect. A chip saved, means it’s one less chip you need to earn!

In business, there are two key aspects in building your business. One is trying to GROW more sales. Another is trying to REDUCE your costs. If you reduce the costs in your business, it saves you money and ultimately means you need to make less sales, to stay afloat! 

In tournament poker, the ‘small blind’ will attack the ‘big blind’ to try and gain chips, against only one player. The big blind will have the option to give up the pot, re-raise the small-blind attacking them, to commit more chips into the pot or simply to call the initial raise. 

A range of dynamics affect how these confrontations play out. Each players stack size, aggression style or recent activity at the table will affect the decision made here by the big-blind.

In business, we are always competing against someone else for our customer’s cash. The way this confrontation goes, is based on our resources, our selling style, our business activity and the brand we have developed over time.

There will be competition for your business... so know how you compare to others and how you can have a better chance of winning a customer’s cash.

Finally, in tournament poker there are times that no matter how well you play the game or how many chips you accumulate, you have a decision to go ‘all-in’. When the right play is.... all-in....you have to commit your whole chip stack to win a large pot, or even win the tournament. You know the game well, how it needs to be played and it brings you to this point. It’s what the journey has been for...and it fires the adrenaline!

AND 

In business, these times arrive also.

There are times that no matter what you have done up to this stage, there is a need for a ‘all-in’.

To commit big to a new product range, a new asset, bring on some staff, enter a new territory....ultimately bet big on success! Don’t hide from it. Understand your business and recognise these opportunities when they arrive and commit to the.... ALL-IN!!

We look forward to next time...WE ARE DIFFERENT!

About The Startup Chief

The Startup Chief has been supporting, advising and mentoring start-ups to launch their business for over two decades! With over 500 start-up entrepreneurs trained or mentored to launch, we have some real-world experience in the do’s and don’ts to make your idea a success!

Our aim with these writings, musings and upcoming newsletter is to help as many people as possible ‘chase their OWN dream’, start the business THEY HAVE always wanted, and find HOPE AND FULFILMENT…in making it a SUCCESS!

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The Startup Chief