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Poker – a Metaphor for Business

Written by: Nicholas Fraser

Article Overview: Poker – a Metaphor for Business One of my sins (if you can call it that) is to play online poker. Not a great stakes player I hasten to add; I tend to play in tournaments with $5 to $10 entry fees. Actually I am quite good at that level and have made a small profit from my forays. But interestingly enough Poker has something to say about business that is worth repeating.

Poker – a Metaphor for Business

Poker – a Metaphor for Business

One of my sins (if you can call it that) is to play online poker. Not a great stakes player I hasten to add; I tend to play in tournaments with $5 to $10 entry fees. Actually I am quite good at that level and have made a small profit from my forays. But interestingly enough Poker has something to say about business that is worth repeating.

As with business you need to understand the market and by this I mean the game you are playing and the inherent odds (risks) that come with the game. Poker has an element of luck but that luck can be managed by a good understanding of the odds involved. In business luck is important too; being in the right place at the right time but then I could quote the old salesman’s line

“The harder I work, the luckier I get”

In poker, the more you read, the more you play the more the luck comes because you see where the odds are and can judge when to make that risky bet or call. But of course that luck has to be set against the competition.

I am going to write a separate article on competition but one thing I would say here is that like the Poor, competition is always with us. In Poker you invariably are on a table of ten players so you automatically have 9 driven opponents trying to take your money. The important point to remember in Poker is that you need to understand (read) your competition. Know the way they play, the way they think and what their level of skill is. Now you can do this on the day, watching how they play but you can also access information on the internet about the players in terms of their skill set and performance. Business is just the same. You need to understand well what and who your competitors are.

Also how many of them are there; on a ten player table with 52 cards in play and in No Limit Hold Em each player gets 2 hole cards and then 5 open cards are put for each player to make a hand. Therefore for each game 25 or some 49% of the cards are in play. This means that your competitors are likely, very likely to have a competitive hand. In business you must, I repeat must consider your competition are very likely to have something worthy of review. What is it they are likely to have? Is it worth playing/competing against them? Like the Kenny Rogers song

“Know when to hold em, know when fold em, know when to walk away and know when to run”

In business that ability to walk away is a key difference between success and failure. Reviewing your position and what the market and the competition are doing and making the right decision whether to invest or not. By the way the key word in that sentence is position? In Poker if you deal or in on line poker are “on the button” then when the betting comes you are the last play. This puts you in a commanding position to dominate and set the tempo of the betting. Using your position to good effect, taking into account the odds and the competition is where the real money is made. When you are in a bad position (Under the gun or first to bet for example) then you need to be very careful. Understanding just what your position is in the market is a key activity in business.

Now I have only covered a few bare strategic points about Poker. There are many books that can explain it better than I. But in this limited summary, Poker tells us you need to look carefully at the market, the competition, understand our skill set and abilities and realistically assess our position and opportunity. Now on the Poker table you are alone to make this review. In Business you can call in a friend, a mentor to help you.

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