Lessons from playing >1,500,000 hands of poker: part 1
what I learned from winning/losing thousands/day and how it applies to business
Est reading time = 4min 50sec ⏱️🚀
Consider all options in every decision.
Uncertainty and failure are part of life. I am entitled to nothing.
Evolve or die.
Let me share 2 things before I get into what I learned from poker:
Why look at poker for lessons?
Poker has clear and immediate consequence. You either win or you lose your hard-earned $. Systems with clear feedback are a great teacher. Something to think about when building culture.
Most things in life abide by the same laws. Similar laws govern domain A and domain B. After studying each domain you start to see patterns - not force-fit, but real applicable patterns. Some of these laws are human psychology, evolutionary biology, game theory, ethics, risk management. These laws are present in our intimate relationships, in building a business/team, in financial markets, in building great products etc. The same laws govern poker.
What are my credentials? Think it is odd to talk about sheer $ won or to share graphs from a database - so sharing a mix of lighthearted info:
spent thousands of hours studying on my own and in peer groups
hired coaches to improve my game and coached others
was financed (poker players use the term “backed”) by consortium of players to play in specific instances
longest continuous session = ~60 hrs
I was never good enough to play in the toughest games. Poker was never a primary source of income, but I love the game. Streamlabs and maybe Minecraft are the only things where I’ve applied myself more. I obsessed over poker, thought a lot about how to improve, and suffered the consequences along the way.
4 lessons for today: (1) consider all options, (2) uncertainty and failure are part of life, (3) reputation matters, (4) evolve or die.
(1) Consider all options
Summer of 2006 I approached a high stakes player (call him A) to coach me. I’ve seen him with large amounts of money every day playing the highest stakes online. I was a junior in college and was trying to take poker more seriously. He agreed. I paid him $XXX for three 50-minute lessons. This was a lot for me at the time, but I wanted to get better. We were discussing a hand from a recent session where I was facing a large bet on the river with a mediocre hand. I was behind most hands that would bet here for value and was ahead of bluffs. A bluff catcher.
Me: what do we do here- call or fold?
Me: we have a bluff catcher - either we call his bluff or we fold
A: raise because insert_XYZ_logic
Lesson: consider all options in some decisions. Train your mind to start out by listing all decision tree branches and then systematically eliminating each branch. Let’s list every edge case when building a product or why a launch may fail. Let’s think through every angle when preparing for a the negotiation. Intuition does play a role. This doesn’t apply to all decisions, but I think it’s a good practice for some decisions.
(2) Uncertainty and failure are part of life. I am entitled to nothing
I’ve had break-even stretches that lasted 90 days (i.e. where I put in large volume of what I’d consider my A or A- game and won $0). I’ve lost large pots to people where I was a clear favorite. Some of these folks spent a fraction of the time studying the game and were rewarded. Why not me?
Lesson: Shit happens. And we are bad at estimating when shit happens. We are even worse at estimating black swan events. On top of that, we can do a lot of things right - go to a “good” school, put the shopping cart back, spend nights and weekends on our product launch or side hustle and it still flops. So what? Think it’s important to develop mental fortitude to deal with the negative, play your A-game and just keep going. In the long-run things will work out.
(3) Reputation matters
Poker community is built on trust and reputation. People loan each other large sums of money or book action via one-liner texts without ever meeting in real life. No contract. Just your word and your name.
Lesson: Be impeccable with your word. Follow through on your actions. Give to others (a lot). Build your reputation via many interactions. I think the same applies to business - especially today.
(4) Evolve or die
We start playing. I have an edge on you. Maybe you are too conservative in certain scenarios and it is suboptimal long-term. Maybe you have some other hole in your game. But this is not a finite game and we keep playing. Each hand we play is an opportunity to do better. And you break me down as well. Not only that - but you make adjustments to your own game. You are now more aggressive in the spot where you were conservative. I do not adjust. You win it all at the end. I am scratching my head - wondering where my edge went and how I lost to you? Maybe I realize I was outplayed and learn from this. Maybe I let my ego eat me and chuck this off to you being lucky.
Lesson: Evolve or die. Stay complacent, abuse your edge, and lose. Long-term those who innovate and keep pushing win. Evolution is a universal law. Poker and business are no exception. There are countless stories about teams resting on their laurels and Nth movers entering the market and winning.
If your friend or significant other is asking you to do a house chore - maybe there is a 3rd creative option besides doing it and not doing it.
OK it’s not that complicated, and you should probably do that thing, but you get the meta point.
That’s it! Be good
Have pages of gdocs, voice notes, and memos with lessons/battle scars from poker. I’d love to share them with you because I do think it is a fascinating game, but think it’s best to parse this out.