Shenaly Amin, UK Country Manager at LeoVegas.com, discusses how poker skills can be used in business and personal life.
Mainstream media tends to portray professional poker players as reckless gamblers. While this can certainly be true in some cases, in reality being a consistent winner at the poker table requires an unrivalled amount of discipline.
In a game where your edge is relatively small, you’ve got to use every available advantage to simply stay afloat. Successful poker pros are walking encyclopedias of methods to reduce risk and increase profit. People in the gambling industry could learn a lot from poker as the secret tricks used by professionals are invaluable when applied to everyday situations – not only in your personal life, but also in business.
Odds are your friend
Perhaps the most basic maths skill in poker is the concept of Expected Value (EV). If you have a good chance to win a £1,000 pot by only risking £100, that’s considered +EV. If you make enough +EV decisions you are going to be profitable.
In your business life, don’t be too afraid of risk if the reward is clearly there. For instance if you want to invest £1,000 in a start-up and you truly believe it has a 20% chance of earning £100,000 in its first year of business then that’s a very good investment.
Another way to use odds to help benefit your personal life is to look at some of the positive ones in life. One example is that quite a few people are scared of flying but statistically you are far more likely to die in a car crash. Odds can actually give you a sense of security. It’s important to realise that both poker and life are incomplete information games – odds provide more information.
It’s natural to lose sometimes
Here’s a secret: even the best poker players in the world lose! The reason is that poker, like life, has a large element of luck. You could still get extremely lucky against a world champion and take his entire stack. Ultimately, skill will rise to the top – that’s why ‘professional’ poker players even exist in the first place.
It’s tough to argue with this approach in life when business icons like Steve Jobs, Bill Gates and Warren Buffett experienced plenty of short-term failure but eventually changed the world. The trick is that you don’t concentrate on short-term results – instead focus on perfecting the process and results will come naturally.
Don’t get too attached to a hand
A problem that can occur with amateur poker players is that they get too attached to aces – especially when the dealer puts out a dangerous board with flush and straight possibilities. All the signs are there to abandon ship, but players hate the idea of waiting to potentially win a bigger pot.
In comparison, poker pros have the ability to be more clinical, carefully assess every situation, and be less attached. In the gaming business there are moments when you simply have to fold. If you have a high-paying job but you hate it, then those aces aren’t as good as they looked originally. Likewise, if your business partner continually makes bad decisions then maybe it’s time to move on to a new project.
Only risk what you can afford to lose
A huge part of stability in poker is a strict financial system called bankroll management. Poker players put aside a special allotment of cash that is used just for poker. The first step in a poker career is scraping together a bankroll; to survive losing sessions you typically want to have more than 50 buy-ins at the stake you play (that’s a conservative measure).
It’s the same thing in life. If you want to start-up, expand your business or make investments, you need some capital. If something costs too much money then concentrate on smaller projects. It’s important to separate your personal and business cash.
Minimise your leaks
Poker players consider any mistakes that lose money long-term as “leaks.” Sometimes these are simple things, like calling just 5% too often or making bad bluffs with ace-king. Poker players actively try to patch up their leaks by making small changes to their games.
This is easy to utilise in daily life outside of business. If budgeting is a priority and you buy a Starbucks latte every day, that’s a pretty big leak when you could make coffee at home for a fraction of the price. The real skill is honestly analysing your life and understanding what “leaks” you have that can be plugged. Every leak that’s plugged brings you one step closer to being the “perfect” player.