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article imageHow Poker Skills Help Entrepreneurs

By Dusty Wright     Sep 9, 2013 in Business
Texas Hold’em has gained the reputation as one of the most complex games in the world. Why? Because humans, endowed with logic, emotions, and irrationality, are themselves sophisticated and sentient beings.
Unlike athletic contests such as basketball or football, poker is largely comprised of mental, psychological, and financial matches between two or more players. Aggression can be countered by clever traps. Superior skill can be negated by a limited bankroll. In one deal, skill and emotional stability can be devastated by bad luck.
Poker is also one of the few games in the world in which amateurs can consistently compete with full-time professionals.
Here are several poker skills that are transferable into the world of entrepreneurship.
Spotting Liars
In poker, especially in no limit games, well-timed bluffs are an essential tool for gaining a long-term edge over opponents. Similarly, one must also learn to recognize when an opponent is bluffing.
The ability to identify when someone is lying is indispensable in business settings. Such a capability enables one to protect one’s assets, reputation, and sanity. With such a skill, one can avoid entering into partnerships with those who would commit fraud and exercise bad judgment.
School doesn’t teach people how to spot liars. One must undergo a cruel hazing period in the real world, or in the poker tables, to obtain such an ability.
Interpreting Body Language
Similarly, poker players are trained to spot tells – something which leads opponents to develop the proverbial “poker face”. This Jedi-like ability requires interpreting body language, reading facial reaction, and assessing an opponent’s comfort level.
Is the person you are looking at being honest or deceitful? Are they practicing reverse psychology on you? Are they intentionally trying to press your buttons in order to stir your emotions? Are they using the race card on you? Are they trying to make you feel guilty?
To succeed in both poker and business, you need to be able to get inside the other person’s head. It’s not always about what’s being said. It’s about what’s not being said. It’s also not always about what you think. It’s about what the other guy wants you to think.
Huge difference.
“When you are the one taking the initiative and forcing the action, you can win the pot by either having your opponent fold or by showing down the best hand,” according to poker.co.uk, an online poker magazine. “In contrast, when you are the one taking the defensive role by checking and calling, then you can only win by showing down the winner.”
Entrepreneurs and business owners can produce tells in business settings and meetings. Is a person’s heart rate unusually high? If so, why? Does a business executive avoid eye contact when making key points? Why?
Does a person appear weak or strong in certain situations? Why?
What is truly motivating the other guy? Are there hidden agendas?
Being able to interpret body language is especially critical during negotiations. Situations will arise where you don’t want to tip your hand (i.e., times when confidentiality is critical), or negotiate against yourself.
Business school may teach managers the science of negotiation, or conflict resolution. Poker teaches the art side of human interactions.
Let’s say that you are an indispensable part of your department, and an outstanding performer. Your company is reaping record sales. Your boss denies you both a bonus and a raise.
Is he bluffing? Is he trying to sabotage your career? Or is he simply too busy to pay attention? How can you tell? If you want to rescue your sanity, you better properly assess what is really going on.
Game Theory
In poker, the vast majority of players are treated as rational actors. Each person acts based on what he thinks will provide him the most profit. As such, players gain practical experience in game theory.
It’s a clean economic model because poker players – and business professionals – are assumed to want money and financial rewards as their primary motivators.
Game theory is how opponents act based on their perceptions about their enemy and his movements. The dynamic spawns deception as a powerful weapon against predetermined plans. As Sun Tzu says, “all warfare is based on deception”.
Game theory is evident in most major business decisions. Company A will avoid infringing on a competitor’s intellectual property because Company A knows it will get sued. If Company B possesses superior technology in a given niche, Company A will avoid a confrontation in that particular market because management knows it will suffer a likely defeat.
Conclusion
Poker players develop an array of skills because each person is trying to preserve their capital as well as increase their profits by outwitting their opponents on the table. Texas Hold’em is first and foremost a game between people, not cards.
That sounds a lot like business, doesn’t it?
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