It’s often said that innovation is born out of crisis. This rings especially true amidst the pandemic. More than 5 million small business applications were filed in 2021 — a stark increase from just 4.4 million in 2020. These applications were filed across industries like retail, accommodation, food service, health, and social assistance. But the sheer number of them spoke to so many people’s desire to innovate and create during difficult times
If you’re an aspiring or relatively new startup founder with just such an attitude, you may be wondering how best to run your business. After all, startups commonly fail due to poor management. To avoid this issue however, you can consider drawing wisdom from any of a number of different sources.
One unlikely but effective source you can turn to is poker. While this may sound unusual, the truth is that poker is more than just a wildly popular card game; it’s also a heavily cognitive activity that can hone skills that translate to business. Here, specifically, is what the game can teach you in this regard.
One thing you learn in poker is bankroll management –– specifically, taking into account the funds you have available before making a buy-in. Simply put, you wouldn’t enter a high-stakes tournament with less than $100. You’ll also learn to recognize that losing, say, 10% of your playing budget on a single game is not a reason to panic, but is rather part of the process that is meant to produce a net gain. These lessons in financial management apply surprisingly directly to decisions you’ll need to make as a startup leader. For instance, you wouldn’t pay for a marketing campaign that won’t effectively draw new business to your startup; you will accept certain expenses that play a part in growth down the road. Ultimately, the better you are able to manage a bankroll, the more effective you’ll be at driving decisions.
Data-Driven Decision Making
In exciting and fast-paced games like poker, it’s easy to lose control of your emotions and make reckless decisions on the felt. But seasoned players know that sticking to a solid, tried-and-true strategy is the best way to play. To this end, poker pros like Fedor Holz and Daniel Negreanu even leverage Game Theory Optimal –– an approach based on the economic concept of the same name. Honing strategic thinking skills like this through poker will teach you how to integrate risk assessment and relevant data into your business decisions as well. You’ll learn to trust a method of reasoning rather than emotional impulses. You can then tackle critical circumstances as they arise, such as knowing how to effectively woo investors when fundraising isn’t going your way.
In both poker and business, losses are inevitable — even if you do everything right. However, this shouldn’t stop you from reaching your goals. To win at poker, you learn not to count your losses, but rather to maintain a positive attitude and press forward. The same is true in business. By learning from your mistakes and not giving up, you set yourself up to find success just ahead. It’s a lesson that countless pro poker players and successful entrepreneurs alike have learned.
Commanding Social Skills
Effective startup founders also need stellar social skills — something that poker can give them. There are multiple social aspects to poker, such as learning and discussing strategies with other players and even gaining a couple of new friends or mentors along the way. Most importantly, you’ll learn to identify the strengths and weaknesses of your opponents, helping you to further refine your strategy in-game. You can apply all of the skill and experience you gain through this socialization in your business relationships when you strike up partnerships, assess competitors, and so on. In our interview with car dealership founder Mark Gilbert, he even discussed how you can also identify what best motivates each employee to work harder and better. This way, you can better lead your team to reach your startup’s goals, and it’s something an experienced poker player will thrive at naturally.
Drive and commitment are crucial to startup success. By taking the time to hone your own business skills through various means like poker, you’ll ultimately get closer to your goal of running a successful startup.