Lately I’ve been into playing Poker with my friends in the weekends. And the more I play it, the more I think of how similar it is between Poker and building up a business. I keep seeing those cards being placed down the table as people and opportunities around a startup company.

"The poker strategizing experience would prove helpful when I got into business." - Bill Gates

CC attribution niallkennedy

Bill Gates once said: “In poker, a player collects different pieces of information—who’s betting boldly, what cards are showing, what this guy’s pattern of betting and bluffing is—and then crunches all that data together to devise a plan for his own hand… The poker strategizing experience would prove helpful when I got into business.”

I don’t know how much that is true, or Bill Gates was just bluffing :P. One thing I do know, that if you look at Poker with a startup perspective, it’s pretty damn correct!

There are many way to compare playing Poker with building a Startup. But this is how I see it:

1. At the start of each round, each player receives two cards. Think of them as the team you have. One card represents business side and one card represents technical side. The stronger your cards are, the better. Just like the more talented and experienced team members you have, the higher your success rate is.

Having high cards on your hand is equal to having good team members

CC attribution rosswebsdale

2. When the 5 other cards are placed down on the table, think of them as potential partners, resources and chances on the market. The more powerful your combination is, the better. Just like the more relevant you put all the pieces of opportunity, facility and people together, the higher your success rate is.

3. With the above 2 basic ideas, we can derive even more details:

- Even if you have an Ace (really good team members, e.g. in technology side), when the other card is weak (not quite good team member in business side) the chance of winning / your success rate is some how lower.

- Even if you have a pair of Ace (either from the beginning, or from the whole combination), it loses to any 2 pairs. This means even if you have an all-star team in the beginning or there is a very good execution, it can not beat a relatively good execution with the right marketing at the right time, in the right place.

- Also, the more money you have, the more advantageous you are. You can put in higher bets to prevent others from pursuing the pod to the end of a round. The rule, in general, is that you have a good insurance (a good pair or high cards in the beginning, a good combination in the Flop - 3 out of 5 cards on the table are revealed), and guts! It’s quite similar to how investors (sometimes founders) would put in more cash and resources (time/energy) to raise the startup’ competitiveness. Of course, if the other player (competitors) have the same financial/resource capability, the competition will also be based on luck.

In general, we can understand why having the 2 high cards (highly talented/experienced founders) in the beginning is more preferable, even though that is not always a golden rule to win. The risk is still pretty high if the other pieces (opportunity, facility and people elements) are just not right.

The "dream team" and the "perfect combination". Still, it cannot beat a 'straight flush'. (Also, Google can be considered a "Royal Straight Flush")

CC attribution eduardo_inflames

This way of thinking may be useful to those who are building a startup, or even investing in a startup. I wonder how good VC folks play Poker, but if they are good at what they do (calculating risk vs. chance and understand people’s behavior), they should play Poker well! For startup folks, it may as well be fun as a team activity.