I am indulged in Poker (Texas Hold ’em) recently. Winning chips is great, but the most exciting part falls into the strategy of getting you there. the process to win chips is really interesting which requires competencies like math, strategy, psychology, and communication.
Playing poker is indeed very similar to running a business (4Ps, SWOT, PESTEL, etc). Your poker game actually starts from picking a table to play (the market you decide to compete), your playing style should be calibrated according to the bet position you are, and you must be able to gain information and read “tells” from your opponents to determine if they are bluffing. You also need to decide how much to bet so to optimize your profit from the pot.
Selecting Table
Before starting any game, I believe poker players should walk around tables, feel the atmosphere, and look at a few hands to get some idea of what types those players are. Are they tight and aggressive? Are they loose and passive? They are your competitors once you take that table. You should also pay attention to the stakes: it usually illustrated with two numbers such as “5/10” – means a small blind of $5 and a big blind of $10. Put in this way, upon getting two cards in the pre-flop, your minimum bet to continue the game is $10 – as long as nobody raise before your turn.
Similar to a business startup, you pick a market to compete. Number of competitors (players) and market size (the stakes size) matter. Do you want to join a table with 1-2 players and high table stakes like 500/1000 (niche market premium price)? Or, would you prefer picking a table with 6-8 players and small stakes like 1/2 (high volume small margin)?
The Pot
The goal of Poker is to win chips. Chips in the pot becomes your revenue. Subtracting chips you put to the pot becomes your profit. It is pretty much a Red Ocean game – the more you gain, the more your components lose. The Blue Ocean concept seldom exist in Poker. Perhaps the only blue ocean strategy is to leave the table and do something else 🙂
Position
In general, the player sitting to the left of the Dealer Button bets first, then the betting goes clockwise (the only exception is the pre-flop bet). You may get it already – all players will be looking at you trying to gain information from your actions.
Betting & Signaling
So what is the First Mover Advantage? Since you are the first one to bet, you can put pressure to everyone on your left by betting big (usually larger than 2-3 times of the pot). Every move of you becomes a signal to your opponents representing the strength or weakness of your cards.
Same happens to the business world. Every product you launch, every press release you hold, every acquisition you make generates a signal to your competitors. It usually generates a series of actions and reactions.
The timeline below is extracted from a presentation I did in Shanghai on March 2011 (credits to Alex, Bosten, Melvin, and Russell). It depicts the “poker game” played by Nokia and Apple around Smartphone, OS, and the music platform. Their actions and reactions are paired by same arrow color; Nokia is above the timeline while Apple is below. Apple was (maybe still “is”) always the first mover from 2005 to 2011. Take a look, it is quite interesting.
Bluffing: The “Tell”
Professional poker players are able to filter out noises (bluffing) and only focus on real information. Look at your opponent, does he blink his eyes a lot? Does he change his sitting style? Does he sweat? Does he shake? Does he do anything which does not seems natural to you? These are all “tells” helping you to fold your cards or continue competing with him.
A good movie and a good book for your interests about tells:
The Movie: Casino Royale (2006)
The Book: What Every BODY is Saying: An Ex-FBI Agent’s Guide to Speed-Reading People (2008)
Bluffing happens a lot in English football business when clubs compete to sign football players.
The Showdown
“Showdown” is the stage that players are required to open their cards, upon all 5 community cards are presented on the table with last bets. It is the moment to compare whose cards combined with the community cards is the strongest. The strongest combination wins the pot.
You could make bad moves that lead to bankruptcy. To prevent that, you should know how much you could afford to lose, which is called “Bankroll Management”. In business, it is far more sophisticated: You have cash, non-cash current assets, fixed assets. However, same simple concept, if you run out of cash, the game is over.
The WSOP
The World Series Of Poker 2013 (WSOP) is more interesting than any TV dramas I have ever watched. Must watch to all poker players. Enjoy!
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DN.ASOBIBA 