How to win at your game.

Similarities to poker illustrate how you are in control

The best strategy usually comes from thinking long-term. This rule of thumb applies as much to the metal business as it does in the game of poker. In poker, just because you win a hand doesn’t mean you’re good and you don’t have more learning to do. But we do learn best when we can see and experience good examples—poker has many. Did you know that what’s good for poker game strategy is in many, many ways good for business strategy? A new business book helps us see the long-term benefits of learning the game well, understanding the odds, and taking control of our future. Use these insights to create your own royal flush.

Last week, I reviewed an advance copy of Delivering Happiness, A Path to Profits, Passion and Purpose. This is a short, but inspiring, new book penned by Zappos chief Tony Hsieh (pronounced Shay). Zappos is an online e-tailer—a small drop ship shoe store that grew from zero to over $1 billion (yes, that was a “B”) in gross merchandise sales in less than ten years. Zappos amassed profit only after its leadership created intense passion building a brand around one seemingly simple purpose (or brand promise): “the best customer service in the world.” The CEO and first time author attributes much of Zappos’ success to observations he made while playing (and studying) poker to fill time while he decided what he wanted to do in life.   

Hsieh, who, in the book, is delightfully reflective, started to make a list of things he learned from playing poker that could be applied to business. In poker, he says, it is important not to confuse “the right decision” with “the individual outcome” of any single hand. For most poker players, “if they win a hand, they assume they made the right bet, and if they lose a hand, they often assume they made the wrong bet.” This is short-term thinking that will most certainly inhibit long-term success.

The “aha” moment.

Perhaps the most important observation Hsieh made of poker was that the game begins before you ever sit down at the table. You can win ten times as much sitting at a table with nine mediocre players who are tired and have a lot of chips in front of them compared with sitting at a table with nine really good players who are focused but don’t have that many chips in front of them. In a casino there are many choices of tables. “Each table has different stakes, different players, and different dynamics” which constantly change. The most important decision is deciding which table to sit at, or when to change tables. Here is Hsieh’s list from the book:

Evaluating Market Opportunities

• Table selection is the most important decision you can make.
• It’s okay to switch tables if you discover it’s too hard to win at your table.
• If there are too many competitors, even if you’re the best it’s a lot harder to win.

Marketing and Branding

• Act weak when strong, act strong when weak. Know when to bluff.
• Your “brand” is important.
• Help shape the stories that people are telling about you.

Financials

• Always be prepared for the worst possible scenario.
• The guy who wins the most hands is not the guy who makes the most money in the long run.
• The guy who never loses a hand is not the guy who makes the most money in the long run.
• Go for positive expected value, not what’s least risky.
• Make sure your bankroll is large enough for the game you’re playing and the risks you are taking.
• Play only with what you can afford to lose.
• Remember, it’s a long-term game. You will win or lose individual hands or sessions, but it’s what happens in the long term that matters.

Strategy

• Don’t play games that you don’t understand, even if you see lots of other people making money from them.
• Figure out the game when the stakes aren’t high.
• Don’t cheat. Cheaters never win in the long run.
• Stick to your principles.
• You need to adjust your style of play throughout the night as the dynamics of the game change. Be flexible.
• Be patient and think long term.
• The players with the most stamina and focus usually win.
• Differentiate yourself. Do the opposite of what the rest of the table is doing.
• Hope is not a good plan.
• Don’t let yourself go “on tilt.” It’s much more cost-effective to take a break, walk around, or leave the game for the night.

Continual Learning

• Educate yourself. Read books and learn from others who have done it before.
• Learn by doing. Theory is nice, but nothing replaces actual experience.
• Learn by surrounding yourself with talented players.
• Just because you win a hand doesn’t mean you’re good and you don’t have more learning to do. You might have just gotten lucky.
• Don’t be afraid to ask for advice.

Culture

• You’ve got to love the game. To become really good, you need to live it and sleep it.
• Don’t be cocky. Don’t be flashy. There is always someone better than you.
• Be nice and make friends. It’s a small community.
• Share what you learned from others.
• Look for opportunities beyond just the game you sat down to play. You never know who you’re going to meet, including new friends for life or new business contacts.
• Have fun. The game is a lot more enjoyable when you’re trying to do more than just make money.

What unfolds in the book is a true story of how perseverance, focus and a little irreverence for the status quo pay off when you also treat people right. Delivering Happiness >http://www.deliveringhappinessbook.com< deserves a space on your shelf next to your favorite business books. As always, let me know your thoughts.

Take action, here is the link to Amazon: http://www.amazon.com/deliveringhappiness

Legalese: I, David Stahl, received free advanced copies of this book. My statements are unbiased, honest opinions.