4 ms·

A Story about Losing

101 points by georgeoliver 12y ago

grimmfang 12y ago
If you don't play poker this makes you realize why YC considers poker players to be good founders.
empressplay 12y ago
Poker is a pretty good analogy for entrepreneurship -- you constantly need to re-evaluate your position, re-judge your market and your competitors, calculate probabilities, have a plan, and bluff your ass off =) And, of course, if you seriously mis-step in either pursuit it can cost you the farm. The trick is not to do that.
- nmjohn 12y ago
  > And, of course, if you seriously mis-step in either pursuit it can cost you the farm. The trick is not to do that. Moreover (and much less commonly reported on) you can do just about everything wrong, and still get lucky. A good poker player knows they got lucky and shouldn't have won the hand. I've seen too many times cases where someone has a successful exit and think that means they now are experts, attributing 100% of the success to themselves. Then they don't understand why their next startup fails miserably when they do everything the same.
  - sejje 12y ago
    > A good poker player knows they got lucky and shouldn't have won the hand. Possibly nitpicking, but a good poker player is unconcerned with whether or not they won the hand (from a strategic standpoint). They're worried about the expected value of the course of action they chose, and how to maximize EV at every decision. Poker players actually do commonly report on this phenomena, however they report on it inaccurately--most report that they made their poor decision (which ultimately won) for a particular reason. Some intuition if they made a lucky guess about their opponent, perhaps, or a feeling if they had a lucky outcome, or (unknown to them) miscalculated "pot odds." I've found that in the same way that most people believe they are good poker players, or above average drivers, people tend to believe that they are good at anything where skill and talent is not directly obvious (basketball, for instance), or start believing that long before they are actually good at it. Looking up local photographers on FB is one of my favorite pastimes for this reason.
    - bostik 12y ago
      > Possibly nitpicking, but a good poker player is unconcerned with whether or not they won the hand (from a strategic standpoint). Well, even a decent player will cringe when they realise they got the money in with bad odds. When this happens a couple of times in a row, they may start to question their own ability. It's easy to shrug off a couple of bad beats as "running against the top of opponent's range". Hit a string of these hands and suddenly you're beginning to question your reads. Has the tone of the table changed and you missed it? Do you need to adapt quickly and if so, how? And perhaps most important of all, have you already done that without realising it? In the long run the game is an infinite series of calculated risks. There is no trick to winning, other than having a strong enough bankroll, and to be better than majority of the field. In this context, bankroll also includes mental capacity to deal with the blows. As long you're doing everything, or even most things right, probabilities will catch up. It doesn't make the game any easier, though.
- jacquesm 12y ago
  Bluffing in poker is a strategy that can work from time to time. In business bluffing is simply very stupid unless you have a once-in-a-lifetime shot at something where the bluff is the only thing that can make it happen. In that situation the future value of your reputation is possibly worth less than the potential gain and you might consider the bluff. Unlike poker in business we don't get to start another hand or another game or tournament so when your reputation is marked 'bluffer' your credibility drops like a stone. Poker players use bluffing cautiously for that very reason. So, if you 'bluff your ass off' I don't think you'll be going very far before your balloon is punctured. (And that goes for poker playing too!)
  - wastedhours 12y ago
    Exactly. You can fake the chicken to a certain degree, but at some point you need to produce an egg...
  - iopq 12y ago
    You'd be surprised. A good poker player will bluff a lot. Up to 1/3 of the time on the river when he has nothing, more when he has a draw before the river card, and almost always with a strong draw. There is no way to exploit this kind of strategy because as long as you're not bluffing every time (remember, he still has it 2/3 of the time or gets there before the river) you have to consider that he's not bluffing sometimes. I guess the business analogy is that a founder will bluff more often if he knows there is a lot of real potential.
  - GFischer 12y ago
    I equate bluffing in a startup with the "customer validation" part where it is advised to take preorders or signups for a product you don't have yet. It's something that many startup gurus advocate, but I've always thought it a bit unethical (it's not like Kickstarter where you know it might not get built).
    - jacquesm 12y ago
      I much prefer the 'pilot customer' myself where you create the product in close collaboration with the first customer. That way you get the benefits of instant validation, a chance to build a lasting relationship, immediate cashflow once some part of what you deliver is ready and you don't have to lie to anybody.
- idlewords 12y ago
  And you're producing nothing of value to the world, and living off other people's money.
  - iopq 12y ago
    You're providing entertainment to the people who still want to lose money to you. Remember, this is possible because others have disposable income.
- chippy 12y ago
  > it can cost you the farm Is this why some businesses only invest/gamble with other peoples money? - To lessen the personal pain of losing.
  - auxbuss 12y ago
    The businesses aren't gambling, in that case, they are hedging. The investors are the gamblers.
diogofranco 12y ago
Recommended read, from a fellow ex-poker player. I was expecting a bad beat story at some point, but you got around it nicely :) This kind of emotional roller-coaster is your every day life as a poker professional, especially if you play tournament poker which is the highest variance form of them all. Even as you get used to a certain amount of pain, your worst downswing is always ahead, if you play enough hands. The one way I know to handle it is to train yourself to never think about what could have been. What's in the past is in the past. You decided not to do that and quit though, which is always a sensible decision and I'm glad you wrote about it so beautifully.

101 points by georgeoliver 12y ago

If you don't play poker this makes you realize why YC considers poker players to be good founders.

Poker is a pretty good analogy for entrepreneurship -- you constantly need to re-evaluate your position, re-judge your market and your competitors, calculate probabilities, have a plan, and bluff your ass off =) And, of course, if you seriously mis-step in either pursuit it can cost you the farm. The trick is not to do that.

nmjohn 12y ago
> And, of course, if you seriously mis-step in either pursuit it can cost you the farm. The trick is not to do that. Moreover (and much less commonly reported on) you can do just about everything wrong, and still get lucky. A good poker player knows they got lucky and shouldn't have won the hand. I've seen too many times cases where someone has a successful exit and think that means they now are experts, attributing 100% of the success to themselves. Then they don't understand why their next startup fails miserably when they do everything the same.
- sejje 12y ago
  > A good poker player knows they got lucky and shouldn't have won the hand. Possibly nitpicking, but a good poker player is unconcerned with whether or not they won the hand (from a strategic standpoint). They're worried about the expected value of the course of action they chose, and how to maximize EV at every decision. Poker players actually do commonly report on this phenomena, however they report on it inaccurately--most report that they made their poor decision (which ultimately won) for a particular reason. Some intuition if they made a lucky guess about their opponent, perhaps, or a feeling if they had a lucky outcome, or (unknown to them) miscalculated "pot odds." I've found that in the same way that most people believe they are good poker players, or above average drivers, people tend to believe that they are good at anything where skill and talent is not directly obvious (basketball, for instance), or start believing that long before they are actually good at it. Looking up local photographers on FB is one of my favorite pastimes for this reason.
  - bostik 12y ago
    > Possibly nitpicking, but a good poker player is unconcerned with whether or not they won the hand (from a strategic standpoint). Well, even a decent player will cringe when they realise they got the money in with bad odds. When this happens a couple of times in a row, they may start to question their own ability. It's easy to shrug off a couple of bad beats as "running against the top of opponent's range". Hit a string of these hands and suddenly you're beginning to question your reads. Has the tone of the table changed and you missed it? Do you need to adapt quickly and if so, how? And perhaps most important of all, have you already done that without realising it? In the long run the game is an infinite series of calculated risks. There is no trick to winning, other than having a strong enough bankroll, and to be better than majority of the field. In this context, bankroll also includes mental capacity to deal with the blows. As long you're doing everything, or even most things right, probabilities will catch up. It doesn't make the game any easier, though.
jacquesm 12y ago
Bluffing in poker is a strategy that can work from time to time. In business bluffing is simply very stupid unless you have a once-in-a-lifetime shot at something where the bluff is the only thing that can make it happen. In that situation the future value of your reputation is possibly worth less than the potential gain and you might consider the bluff. Unlike poker in business we don't get to start another hand or another game or tournament so when your reputation is marked 'bluffer' your credibility drops like a stone. Poker players use bluffing cautiously for that very reason. So, if you 'bluff your ass off' I don't think you'll be going very far before your balloon is punctured. (And that goes for poker playing too!)
- wastedhours 12y ago
  Exactly. You can fake the chicken to a certain degree, but at some point you need to produce an egg...
- iopq 12y ago
  You'd be surprised. A good poker player will bluff a lot. Up to 1/3 of the time on the river when he has nothing, more when he has a draw before the river card, and almost always with a strong draw. There is no way to exploit this kind of strategy because as long as you're not bluffing every time (remember, he still has it 2/3 of the time or gets there before the river) you have to consider that he's not bluffing sometimes. I guess the business analogy is that a founder will bluff more often if he knows there is a lot of real potential.
- GFischer 12y ago
  I equate bluffing in a startup with the "customer validation" part where it is advised to take preorders or signups for a product you don't have yet. It's something that many startup gurus advocate, but I've always thought it a bit unethical (it's not like Kickstarter where you know it might not get built).
  - jacquesm 12y ago
    I much prefer the 'pilot customer' myself where you create the product in close collaboration with the first customer. That way you get the benefits of instant validation, a chance to build a lasting relationship, immediate cashflow once some part of what you deliver is ready and you don't have to lie to anybody.
idlewords 12y ago
And you're producing nothing of value to the world, and living off other people's money.
- iopq 12y ago
  You're providing entertainment to the people who still want to lose money to you. Remember, this is possible because others have disposable income.
chippy 12y ago
> it can cost you the farm Is this why some businesses only invest/gamble with other peoples money? - To lessen the personal pain of losing.
- auxbuss 12y ago
  The businesses aren't gambling, in that case, they are hedging. The investors are the gamblers.

diogofranco 12y ago

Recommended read, from a fellow ex-poker player. I was expecting a bad beat story at some point, but you got around it nicely :) This kind of emotional roller-coaster is your every day life as a poker professional, especially if you play tournament poker which is the highest variance form of them all. Even as you get used to a certain amount of pain, your worst downswing is always ahead, if you play enough hands. The one way I know to handle it is to train yourself to never think about what could have been. What's in the past is in the past. You decided not to do that and quit though, which is always a sensible decision and I'm glad you wrote about it so beautifully.