How to Win at Poker and at Business
Deepak Thadani learned how to play poker during a trip to Atlantic City in 2004, a few years after he launched a high-end network security company in Woodside, N.Y. He soon discovered that many of his clients—CEOs and CFOs of large New York companies—were also aspiring card sharps. So he organized a monthly game. "Poker's like the new golf," says Thadani. "People get together at the poker table, they play, and they build relationships."
He picked up on the intricacies of the game quickly. In 2006 his prize for winning a $600 buy-in tournament was a free seat at the $10,000 buy-in World Series of Poker main event in Las Vegas. He didn't get very far in that, the mother of all poker tournaments. But playing alongside the seasoned pros helped Thadani discover that people who are successful in poker have a lot in common with people who are successful in business. "It's not the hands that you're dealt; it's the way you play them that separates the regulars from the pros," he says. "Just like in business."
Poker professionals, too, can't help but notice the overlap. In the past decade, as poker has been inundated with amateurs who learned to play from televised tournaments and online gambling sites, many of the most successful no-names have had backgrounds in business. The list of recent World Series of Poker main event champions includes a TV producer, a patent attorney, an accountant, an investment banker, and a carpet manufacturer.
"The most successful people in the business world, what they do best is manage people, or understand people, or know how to relate and deal with people. And that's what poker is all about—people," says Tom McEvoy, a veteran player who won the main event in 1983 not long after giving up his first aspiration, accounting, for a career in poker.
Acting persuasively, reading opponents' motives, and handling the subtleties of a monetary transaction are skills the poker greats work tirelessly to hone. These same skills are essential for negotiating a business deal.
In essence, each hand you are dealt in poker is like a product whose value you are trying sell to the rest of the table by placing bets, raising them, and calling other players' bets. Your hand frequently won't be the most valuable on the table. But by piecing together the limited information you have about your opponents and their hands—one might look nervous, one might be talking a lot, one might have a history of folding—you may be able to win with a well-timed and persuasive bluff.
Of course, winning card players aren't always bluffing. Sometimes they have the best hand possible—"the nuts," in poker lingo—and have to decide exactly how much they can bet without scaring off other players. "Figuring out how best to price things to give yourself maximum value is something that's exactly what you do in a poker hand, and it's exactly what you do when you're trying to sell something in business," says poker pro Daniel Negreanu. "If I feel like I've made an offer, and I feel like I can get more on it, I'll continue to push until I feel [the other guy] is at his breaking point."
When it's time to bluff, or to call an opponent on their bluff, it's important to know who you're dealing with. Every morsel of information you can pick up—their posture, how they move their eyes, where they put their hands, what they say or don't say—can be a clue to what kind of poker hand they have. "When I'm sitting at the table even for 30 minutes with people I don't know, I can tell a lot about them," says poker pro Chad Brown. "Poker is about incomplete information, so you take that incomplete information and you have to make an analysis of how you want to play against each of those players."
But in theory at least, there's one big difference: In a business deal, often everyone goes home a winner, having gotten at least part of what he or she wanted; in poker, there's one winner, and the potential to lose big is great.
Poker pro Barry Greenstein knows this difference first-hand. Greenstein was one of the first software designers at Symantec (SYMC) when it was founded in the early 1980s, and he played a role in negotiating some 20 of the company's acquisitions through the early '90s—including that of Norton Utilities, Symantec's biggest coup. The pitch to Norton, he remembers, was win-win: "'If you come along with us, we're so much better at sales and marketing that you will sell more of your product and make more money that way.' For us, we needed to make these acquisitions because when you go public, investors want to see you have a diverse product line."
By contrast, when he's playing poker, says Greenstein, "generally I'm negotiating, so it's good for me and bad for the other guy."
See BusinessWeek.com's slide show for negotiating lessons from poker pros.