By Liv Boeree, British poker champion
Starting a business for the first time is a bit like pulling up a chair at a high-stakes poker game. You might have read up on how to play or done some research online, but you’re still a rookie.
The parallels don’t end there. Great poker players like great entrepreneurs have learned over time to cope in intimidating situations, to gauge rivals and to work with imperfect data to arrive at the best possible outcomes.
So it stands to reason that the average small business owner could learn a thing or two from an expert poker player. I am one of the only women worldwide to have won a top ranking international tournament.
In 2010 I took home €1,250,000 (nearly £1 million) by coming first out of 1,250 people in the European Poker Tour. A Pokerstars Pro, I am at the top of my game and in career littered with top table finishes I have earned around £2 million – not bad considering I am still in my early 30s.
Here are my top tips on how to stay cool and win big:
1) Don’t be afraid of decisions
The average game of poker involves hundreds of individual hands and thousands of decisions. Should you play your hand or fold? When should you raise and by how much? And when is a good time to go “all in”?
Clouding these decisions is a distinct lack of usable data – you can’t see the other players’ cards. In business it’s the same, you must make your play with only about 50% of the information you would like to have.
Missing info includes what your competitors are planning, who will be running the next government, what will the global economy will look like in five years, will key staff members want to retire or move on, will a big client decide it’s time for a change?
But you have to make decisions, and lots of them. As any entrepreneur will tell you it’s better to make a bad decision that not make one at all.
2) Learn all you can
As an entrepreneur it’s important to never stop learning. Despite winning one of the biggest tournaments in the world, I still read up on aspects of poker to see if I can improve my strategy.
How are people approaching the game, what new techniques are en vogue, have I learned all there is to learn about game theory? Entrepreneurs should also keep their ears open, attending industry events and listening to the experts.
It’s important to never stop learning. Otherwise your thinking can get stale and you miss information that can help you win. It also helps you enjoy what you do when you’re constantly absorbing new information and keeping things fresh.
3) Know your enemy
The importance of learning extends to your rivals too. We’re not talking industrial espionage here, but it’s helpful to know who you will be competing with for major contracts or the most talented staff.
When you have been on the poker circuit long enough you learn a lot about other players, how they approach the game, how they bluff and their appetite for risk. This helps you defeat them, knowledge is a tool in your armoury.
4) Learn to let go
A bad product or service is like a losing hand. Investing more time, effort and money into things that don’t work just makes the problem worse. Sometimes it is best to cut your losses and move on to the next round.
In poker, raising on a bad hand is usually a bad call. In business, sweating buckets on something that people don’t want is equally ill-advised. Better, then, to throw in your cards and focus on something new or better.
When you play poker a lot you develop an instinct for when you need to keep going and when to pull the plug. You should concentrate on the end-game, not try to win each individual hand. Focus on winning when you’re in a strong position, rather than throwing money at something that’s destined to fail.
5) Understand the strength of your hand
When you negotiate with a supplier or client it’s important to understand how important your business is to them. Will they roll-over if you ask for a 10% discount or increase your prices a little, or will they laugh in your face and find a new business to work with?
In the real world when I negotiate something, it is like betting on the strength of my hand. How much do these people need me and at what point do I think they will walk away? It helps to go into meetings knowing how important you are to people.