Why you should run your startup like a poker player (Replay)

So there are a few things about a poker game, and I guess I'm thinking of a game of Texas Hold'em in particular for those who play it.

It's the most common tournament format.

Like you, Chris, I'm not actually a big poker player, but I've played enough poker and I've read enough books [laughs] about poker and watched enough movies about poker, Casino Royale is obviously the best, that I really see a lot of commonalities between how great poker players play the game and how great startup founders play their game.

And it is a game.

When I say it's a game, I don't mean that it's not serious, but what I mean is it has rules and techniques that you really need to think about.

And so I just wanted to talk about a few of the high-level commonalities, and then we'll dive into each of them and talk about how they apply to startups.

The first way in which startups are like poker is that it is iterative.

You're not just playing one hand, you're playing multiple hands, hand after hand, and each time you learn something, and each time things fall a different way.

The second is that poker has a concept called blinds, which is even if you're not participating in a hand, you have to bet a little bit.

And that to me is very much like the concept of burn rates in a venture-backed startup, where you are slowly losing money.

The countdown to $0 is on.

The third thing is you have to make decisions based on uncertain information.

You will never know everything that's going on, so you need to internalize that and still be good at decision-making.

The fourth is progressive learning.

You need to learn things a little bit at a time and build on that and make use of the fact that you're not going to learn everything at once.

The fifth is what's called resulting or avoiding resulting, which is being really clear about the difference between the quality of the decision and the quality of the outcome.

Because again, this is a game of chance.

That is true for startups, it is true for poker, so you really need to separate those things.

And the final thing, which is maybe not the best thing that you want to hear as a startup founder, but it's certainly true, is there is a relatively low probability of a successful outcome in any given match, and so you need to be aware of that and consider what that means for you as an entrepreneur, as a founder, and as part of a broader career.

So that's the high-level thinking.