Every year, The World Series of Poker allows the best players in the world to pit their skills against each other. This year, there has been an extra buzz around The World Series of Poker. First of all, there was the record-setting Colossus tournament. Then, a player won an event he accidentally entered.
At first glance, poker seems a lot like chance. After all, these big winnings aren’t coming to all the players. To some degree, it’s true that chance plays a role; you can’t predict everything that will happen in a game. However, there are some things you can do to improve your chances of winning something.
In many ways, poker is a lot like business. In fact, you might be surprised at how learning to play poker can help you improve your business.
In many ways, poker is about managing risk. You have to understand what makes your hand great, and when it makes sense to trade in some of your cards. High-level poker players understand the connection between risk and reward, and the best players often take calculated risks, based on what they have in their hand–and what they know other players are likely to have.
The same is true in business. You might not always be in complete control of what happens with your business, but you do need to be able to analyze situations and opportunities, and determine when it makes sense to keep playing, and when you are better off moving on to the next opportunity.
Sometimes managing risks involves being pickier about the hands you play, just as you might want to scrutinize the investments you make in your business. Jim Wang, founder of Wallet Hacks, believes, “It’s better to pass on marginal opportunities in order to be ready for the great investments. Don’t let pressure or panic dictate what you do; be deliberate and only move forward on the opportunities you feel cannot be missed.”
Poker players also understand when it’s time to seize the opportunity. In the movie Ocean’s Eleven, there’s talk about how the house always wins, unless you play your cards right when the right hand comes along. If you can manage your risk well enough to create space for a big opportunity, and you are ready for it, you will come out ahead in the long run and it can be great for your business.
Understand How to Read People
Playing poker is about reading people. Good poker players notice when someone bluffs, and can see when there is a good chance someone else has a better hand.
Of course, in business you probably aren’t trying to outbluff the competition (although sometimes it feels like it). Instead, you need to be able to read others. Are you close to closing a deal with a potential partner? Can you read a customer to figure out when you’ve reached the final stage of your negotiation?
From audience segmentation to studying your rivals and learning to adapt your own strategies, the lesson of reading people is one that translates well to business. In fact, the art of reading others and learning from others is one of the biggest lessons you can learn from poker.
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Poker players have to change things up when circumstances change. A new card can mean the whole situation is new and requires changes. In the same way, you need to be adaptable in your business if you expect to succeed.
In some cases, poker players change strategy throughout the game. You need to be willing to make changes in your business if you want to succeed in the long-term. A good poker player knows that when something isn’t working, it’s time for a change. In some cases, even what has worked for the last three hands suddenly no longer makes sense if you want to win the pot.
In your own business, you’ll discover that sometimes you need to change things up. As someone whose business takes place primarily online, I’ve seen the landscape change over the last few years. I need to adapt to what’s next with business if I expect to remain profitable. What worked two years ago might not work this year in my business, and I need to be willing to adapt my strategy.
It’s also important to look down the road and understanding that short-term thinking probably won’t help you succeed over time. Sometimes, you have to play a patient game to see good results. And, of course, chance always plays a role.
There are times when you will make the right decision based on your hand, but still be a little behind because someone else has better cards. You can’t give up when this happens, though. Instead, you need to be prepared to adjust your thinking a little, and try again.
Learning the ropes as you go is also important. Most of the time, you don’t get into The World Series of Poker on luck alone. While luck can help, you also need to be prepared. Knowledge, observation, strategy, and the will to take action (and even risk) can all help you become a world-class poker player. Master these traits, and you can also become a successful business owner.
About Tom Drake
Tom is a financial analyst and personal finance blogger. His personal finance expertise has been sought out and featured on Forbes, Globe and Mail, Mint, WiseBread, Bargaineering, and Consumerism Commentary. He can also be found on his own sites, including Canadian Finance Blog and Personal Dividends.