The Obligatory Poker Blog Post
I took up poker around the same time that many other people did, right after Chris Moneymaker won the World Series of Poker (WSOP) in 2003. His apropos name and incredible story of turning a $39 satellite entry on PokerStars into a $2.5 million WSOP Main Event victory led many average Joes to try their hand at the game. I quickly became quite proficient at the game, Texas Hold ‘Em in particular, and started making decent money on the side at it.
A couple of years later, an interesting opportunity to become an online prop player presented itself through a poker playing friend. Basically a prop player is someone who is paid to keep games going, but plays the game with his/her own money. That way the house can continue to make money off the rake during times when the amount of players on the site might be low. So I became a prop player on a now non-existent online poker site called JetSet Poker. I could earn up to $12 per hour per table, depending on the stakes I was playing at. The beauty was that since I was playing online I could play multiple tables, sometimes as many as 4 or 5 at a time, and thus make $48 per hour relatively consistently. JetSet would then plug in however much I earned every Monday into my account on the site that I could continue to play with or withdraw to my bank account if I chose to. On bad weeks, Monday would serve as my insurance account and would keep me afloat for another go at it, but most of the time Monday’s were a nice bonus to tack onto my winnings from the previous week.
All of the online play trained me extremely well for live play since you can encounter so many different situations in a very short amount of time. This is simply due to how much quicker the online game is dealt and the ability to play multiple tables at once. Nowadays I enjoy live play more. Since I rarely play, it’s tough to keep up with multiple tables online. It’s also nice to be able to interact with the other players at the table in a live game. I always try to make it out to Vegas at least once a year to play some live games and I occasionally go to local casinos here in the North Bay to play as well. Although recently, I’ve been able to flex my poker playing muscles at the Startup Game Nights put on by Ignite SSU. If you’re an entrepreneur in the North Bay, come join us sometime.
I quit playing for a living partially due to the passage of the UIGEA in 2006. JetSet, along with many other websites, shut their site down in response. In fact, they still owe me about $1,500 if I remember correctly. Some friends of mine lost tens of thousands of dollars, so I’m not too upset about my loss at this point. I was also at the point where I was growing tired of the daily grind and some experiences with winning money off people who didn’t really have the money to lose didn’t sit very well with me.
Playing poker for a living serves as nearly the perfect training ground for becoming an entrepreneur. So much so that I’m surprised I didn’t realize it before. After making the decision to quit playing for a living and moving up to the North Bay from Santa Barbara, I had the urge to find a more steady paycheck, so maybe that’s why I didn’t make the connection at the time. Now that I’m venturing into the world of entrepreneurship I can see the parallels quite starkly.
Here are a few of the similarities I’ve noticed thus far, which I’m sure I will add to later on as I gain more entrepreneurial experience:
You can go to work and lose money that day
In poker, you’re typically putting up your own money in order to play, which means you can lose your own money. I had days where I lost thousands of dollars. Those days were tough to swallow. Of course there were also the days where I won similar amounts. In the long run it all worked out for me as I was in the black by quite a bit over my poker career. Startups are financially insecure in the sense that they may have initial investment, but there’s not a steady stream of customers that are willing to pay for the product yet. A startup is bleeding cash from day one, even if all of the members are paid in sweat equity.
Proper decision making in the face of extreme uncertainty
In poker, you obviously don’t know what your opponents’ cards are, but the more you play the better you get at narrowing them down to a range of hands. Most people believe that physical tells are what give away someone’s hand, but usually their betting patterns are a more reliable indicator of hand strength. That being said, it’s nearly impossible to know exactly what two cards your opponent has in any given hand. Oftentimes my decision would come down to basic pot odds, which is to say the difference between the amount of money in the pot compared to the amount of money my opponent is betting and the odds of me hitting a hand (or having my hand hold up) and beating my opponent’s range of hands. It is basic risk analysis, although it can get a bit more complex when you add in more technical things like implied pot odds, fold equity, prior history with that opponent, etc. At a startup there are myriad of decisions made regarding product development, marketing strategy, target market, pricing strategy, whether or not to pursue outside investment, and countless other things. The key is to keep a level head and not get overwhelmed, then strategically tackle each decision as best you can with the information you have.
Bankroll management is extremely vital to a professional poker player’s career. I would typically only play at stakes in which I had a total of 10 buy ins. For example, when I was playing $5/$10 no limit, which has a maximum buy in of $1,000, I made sure I had at least $10,000 in my bankroll. Most pros would argue that I should’ve had $30,000 or more and they’re right. Many times I would take a few hits and have to drop down a level in order to build it back up. Most pros go broke multiple times and have to borrow. Unfortunately, it happened to me as well and I was forced to borrow from fellow pros and start from scratch again. A startup is in a similar position and almost all of them would go broke were it not for outside investment. At Bluebird Interactive, we have drummed up some initial investment from friends and family, but will soon be looking for investment from angel investors or venture capital firms. In the meantime, we’re forced to run lean with some of us foregoing a salary and myself working odd hours since I’m still working a day job for the time being.
Just ask my wife, Terese, and she will tell you that I worked well over 40 hours per week when playing cards. It was hard to leave a juicy game with certain players virtually giving money away, and likewise it was hard to leave when I was stuck for a decent amount of money. While I’m mostly burning the candle at both ends due to working a 40 hour per week day job and putting in nearly that much time at Bluebird as well, I can already tell that I will be putting much more than 40 hours in when I make the transition over to Bluebird full-time. I already have trouble shutting the work computer down, putting the laptop down at home, turning off the Kindle, and turning the phone off in bed. There’s always another article I could be reading to learn more, or blog post I should be writing, or research I should be doing, or any of the other countless things I could be doing. All that being said though, I love it.
I am loving the challenge of building a company from scratch. I feed off of the uncertainty and look forward to a time when I can look back proudly at what we built together. I wouldn’t say I live to work, but I love to work when I’m working towards something I believe in.
Photo credit: Cardplayer