Poker is an fascinating game.

Most of the time you spend at a poker table is waiting for your next hand to start. This pace gives everyone at the table plenty of opportunity to get to know each other. Occasional big pots, bad beats and good natured trash talking create shared experiences and inflection points where real relationships are forged. Hard to imagine playing poker with someone a few times and not becoming friends.

Everyone at the table is equal. The billion-dollar VC fund guy and the multi-exit founder have no inherent advantage over the boot strapper and the two gals in a garage. At a poker table, all that matters is how you play the game.

For serious startup founders building venture-scale companies, what passes for “networking” is hardly ever worth the time. Events are open and bursting with service providers, ‘wantrepreneurs’ and curiosity seekers. Poker provides an opportunity to curate a select and intimate group of folks who share a common experience, e.g., founders. Eight founders playing poker is a mush more valuable use of time than an open networking event with 100 “startup community members” and 8 founders.

It is my observation that the most common networking behaviors for founders are A) congregating with people they already know and feel comfortable with, of B) standing the corner with a beer in hand and waiting for someone to come up and ask them what they do. Neither is a productive use of valuable time. Poker gives everyone a simple, shared task so that everyone feels like they belong and can keep up.

Perhaps the most fascinating aspect of poker is how closely the decision making skills and thought patterns resemble those of building a startup company. More on this in a moment. First, let me explain how I came to these conclusions.

I believe I have the unique distinction of having played poker with more venture-scale startup founders (and investors) than any other person on planet Earth. Ever. This dubious honor comes from hosting Startup Poker 2.0 events for venture scale founders and investors every month (except one) for a dozen years in Seattle and (with the help of amazing chapter directors)instigating similar events in five other Startup Haven chapters in San Francisco, Silicon Valley, San Diego, Portland and Los Angeles — more than 300 events so far.

In doing so, I estimate I’ve played No Limit Texas Hold’em with no fewer than 1,000 individual startup founders and many dozens of investors. I’ve had the additional privilege of having played with many of them many times over for many years and have seen them progress both as poker players and as founders.

A common refrain from many of these founders is that they love poker because it has so much in common with building a startup and that it actually has helped them think about how they build their companies. I have long believed this to be true and it’s one of the reasons that I

Arry Yu is a good example. When Arry began playing in Startup Poker 2.0 events in 2008 she was a first time founder and had barely touched a deck of cards before then. Fast forward nearly a decade and Arry is an experienced serial founder with serious startup chops — Arry is an alumni of both the 500 Startup and 9Mile Labs accelerators. She has been playing poker at Startup Haven events all along the way.

Arry wrote about the lessons she learned playing poker and how those lessons influenced her job as a founder. Arry is a great example of a founder who honed her craft by playing poker and while at the same time crushing the myth that poker is somehow a “guys’ thing.” Arry worked her way up to a first-place finish in January, 2017; since there are only 12 of these per year, that’s a big deal.

Arry’s is not an isolated sentiment. It’s actually not difficult at all to find entrepreneurs and investors (well known and not so) touting the principles, maxims and axioms common to both poker and startups and how each informs your potential for success in the other.

Over the past decade, there have been dozens of articles, blog posts and podcasts about poker-plus-startups, many proclaiming the virtues of startup founders playing poker — not just because it’s a great game and a lot of fun, but because it is a source of valuable insights, skills and relationships for startup founders.

A common variant is “The n Startup Lessons Founders Can Learn Playing Poker.” Another common theme is “How Startups are Like Poker.” Still others focus on the parallels between poker and investing in startups.

The upshot is a long list of commonalities shared by the game of poker, the ‘game’ of startups… and the people who do both. It’s not the purpose of this article to catalog or explain all of these common principles, or even the best of them, but here is one example to make the point.

In poker, as in startups, resources are not unlimited. Playing too many poker hands will invariably lead to leaking away all of your bankroll and ending up long-term loser. A good poker player must thoughtfully decide which hands to invest in and which to fold. In the course of a three hour session of poker, a player will need to decide whether to play more than 100 hands. If you’re playing well, you will likely fold 70 – 80 of those hands — or more!

It takes a lot of discipline, patience and focus to wait for potentially profitable situations. In poker, “situations” means more than just the cards you hold. It includes the skill of the other players at the table, your position in the hand (i.e., how much information you have), the size of your chip stack relative to your opponents, your “table image” at the time and more. Maintaining the focus to take all that in while resisting all those tempting but ultimately unprofitable situations is a fundamental skill for good poker players.

Once a poker hand is determined to have a high EV (expected value) then the good poker player plays that hand forcefully, i.e., betting and raising aggressively. In this way, a good poker player puts her resources to work when the odds are in her favor — playing fewer hands over all but with better results because each hand played was a strong hand for the situation. Contrast this with the alternative of playing weak hands or hands of unknown strength because they were not properly assessed. This leads inevitably to poor results and ultimately going broke.

In startups, “bankroll” is synonymous with “bank account” and “hands” are all the decisions a founder needs to make and all those opportunities to do stuff — build stuff, buy stuff, hire people, fire people, pursue partnerships, open new markets, launch a new product, raise more money, hunker down, and on and on and on. There are so many things your startup could be doing but far fewer things your startup actually should be doing. If a founder chases too many “shiny objects” or fails to thoughtfully assess the EV of the decisions and opportunities in front of them, the company’s resources (monetary, human) gets spread too thin, execution suffers, the bank account dwindles and the startup exhausts its runway.

Having (or developing) the discipline, patience and focus required to say “no” to all of the costly distractions is fundamental to purposeful success in both poker and startups.

Class adjourned.

While it’s fascinating to read or listen to folks talking about these principles and lessons, I dare say you don’t actually learn much by doing so. For example, reading that patience and selective aggression are fundamental to both poker and startups doesn’t make you more patient nor does it improve your proclivity to assess situations and opportunities with the goal of deciding which to pursue aggressively. You learn these things by putting in the time to practice them.

A very favorite quote:

I hear and I forget.
I see and I remember.
I do and I understand.
— Confucius

Translation: In order to get the benefit of the lessons of poker you actually have to play poker.

As you play poker you engage in many of the strategic thought processes, tactical decision patterns and interpersonal interactions that every founder faces over and over again in the course of building a company.

Poker is ”wax on, wax off” for startup founders. If you don’t recognize this important cultural reference then you should watch the classic 1985 movie, Karate Kid. In the movie, a bullied teen, Daniel, seeks the martial arts tutelage of humble and mysterious Karate master, Mr. Miyagi.

Rather than teaching the boy the traditional Karate moves he’s expecting, Miyagi puts the boy straight to work painting his house, sanding his deck and, iconically, waxing his car… for days. Miyagi insists that the arm and wrist motions of painting, sanding and waxing be performed precisely as he has shown them to Daniel.

Night comes on the fourth day. From Daniel’s view, he has not yet learned one bit of Karate. Daniel is angry. Frustrated, aching from days of manual labor and feeling like he has become Miyagi’s servant boy, Daniel turns insolent and confronts his master.

Daniel: We made a deal here!
Miyagi: So?                  
Daniel: “So”?! You’re supposed to teach and I’m supposed to learn. Four days I’ve been busting my ass, I haven’t learned a thing!
Miyagi: You learn plenty. (Unphased and dismissive.)
Daniel: I’ve learned to sand your decks. I’ve waxed your car, I paint your house, paint your fence.
Miyagi: Not everything is as seems.

Cursing his master, Daniel storms off. Miyagi calls him back and begins showing Daniel how the motions of waxing and painting and sanding that he’s been ‘practicing’ are actually the fundamental defensive movements of Karate. In the course of less than two minutes Daniel is blocking every punch and kick Miyagi throws at him with the aplomb of a orange belt. Daniel didn’t realize it but he was learning Karate all along — not everything bit of Karate, but some of the fundamentals.

To complete the thesis: while a startup founder plays poker, s/he is developing, practicing and/or reinforcing some of the fundamental principles and skills of building a company.

So what’s a poor, non-poker-playing founder to do? In short: play some poker! For those founders so inclined, here’s a road map.

First, you gotta play with real people, preferably other founders and investors. Online poker is pretty useless for founders wanting to derive startup-relevant value from the game. (That topic is for another time.) No-limit Texas Hold’em is the best game because it’s simple to learn, easy to find, and maximizes the ‘wax on, wax off’ effect.  

If you’re new to poker, start out at 25¢ – 50¢ blinds. A “micro-stakes” game like this will give you a feel for the flow of the game without being distracted by how much money you could lose. The “right” amount of money to sit down with at a game like this is $20 – $50. Pace yourself if you keep blowing through that buyin in less than about an hour — you are probably playing too many weak hands.

As your skills improve, make your way up to $1 – $2. Entering this game with $100 – $200 is a reasonable buyin. Only move past $1 – $2 if you light your cigars with $100 bills. The pots in games bigger than $1 – $2 can get unexpectedly large and the only additional lessons to learn for founders at those levels is how to cope with fear.

Tournament-style poker games are harder to find but I believe they offer the best opportunity for newbies to improve as a poker player and as a founder. In tournament-style poker, everyone starts with the same number of chips and whoever lasts the longest wins the most. The pot created by everyone’s buyin is distributed among the top finishers. A very small tournament game (9 – 10 players) will often be winner-takes-all. As the number of players (and thus the pot) increases, the number of winners increases as well. At Startup Poker 2.0 events with 40 players we usually pay out the top seven players — 7th place basically wins back their buyins.

Learning to play poker in cash games (where you can put in as much money as you like for as long as you can stand it) isn’t as well suited to startup lessons and can be an expensive proposition. But in tournament-style games, the buyin is predetermined. You can’t just reach back into your pocket and pull out another ‘hundy’ when you lose your chips. Because your losses are limited to the amount of your buyin, you can focus on playing the game without the undue influence of fear. Some tournaments allow multiple buyins, but it’s usually just a few. Remember, it’s not about the money.

The pace of tournament poker also provides a better learning opportunity. If you’re like every other poker player who ever learned the game, you’re gonna play too many hands. Part of the problem is you just don’t know yet what a profitable situation looks like. But the bigger challenge is that it takes superhuman patience and discipline to play poker well, even once you know what a profitable situation looks like. But it’s just more fun to play hands than to sit and wait. So you will. And you’ll lose a lot. But tournament-style poker is more forgiving of both your lack of skill and lack of patience.

There are multiple “startup poker games” going on every month in every first-tier tech city in the country and, I suspect, most of the second-tier cities. These games are hosted by VCs, investment bankers, law firms, billionaire/millionaire/thousnadaire founders/investors. Ask around… you’ll find them. But know your budget. The stakes at some of these games are not for mere mortals and unless you have a private wealth manager on speed dial you may be out of your league.

The games hosted by service providers are usually pretty reasonable stakes but probably not where you want to start if you’re new to the game. Think of these advanced-beginner level. These are also sometimes schmooze-fests intended as an opportunity to spend some quality time with existing and potential clients. No harm in that… service providers are people too and the wine is usually pretty good. You’ll also meet some good people.

If you don’t have a Startup Haven chapter in your city, the best games (especially if you’re just starting out) are humble home games started by some founder or investor who enjoys playing the game with friends and colleagues. Lower stakes can be found here, which makes it easier to get through a night of really bad luck without feeling like you’re a degenerate with poor judgment.

Finally, there’s “the apple.” In poker parlance, “the apple” is the big game, the high stakes game, with the biggest sharks (the best players) and sometimes the biggest donkeys (the players who are out of their league.) Some of these games are renowned, hosted and attended by tech and poker luminaries like Chamath Palihapitiya, Jason Calacanis, Phil Gordon, Phil Helmuth, David Sacks and others.

If you’ve played a little poker, you might think it’d be great to get the invite to play with these guys. “Hey, Chamath, nice place you’ve got… where’s the beer?” Well, that’s just what someone who’s played “a little” poker might think. If you haven’t played a LOT of poker at a pretty high level and if you don’t have a gangster’s bankroll, then you really don’t want to get that invite. You will very likely end up “donking off” a lot of cash for the privilege of bragging that you played poker with Jason. Perhaps after your next exit or after you close your Series C and you’ve “taken a little risk off the table.”

I’ve played many hundreds of hours of poker but I cringe at the thought (fantasy really) of getting an invite to play with any of those guys. It’s not because I don’t think I have the poker skill to play against them; it’s because I don’t have the budget to play the game right at the stakes they play — I would be a scared little bunny at their games. Table selection is one of the fundamental skills of poker (and startups) so knowing what table you should be playing at is vital.

The good news is that the stakes don’t actually matter much. Does a billionaire get more out of playing poker than a scrappy bootstrapper hoping move her startup out of the garage soon? No. It’s the same game. Let me put a point on that — it’s the EXACT same game. Mostly you just need to care about playing well, care about improving your game and care about winning, in that order.

Notice that I don’t say “care about the money you could win or lose.” Considering the level you’ll be playing at, the limited amount of time you have to devote to the game and the primary purpose for playing as a founder (i.e., practicing startup thinking and building real and valuable relationships), the money just doesn’t matter. In fact, worrying about making money is counter-productive. Yes, it’s fun to win. Yes, you should try to win. Yes, trash talk the losers you beat that night. But money should not be why you’re playing this game with these folks; the money just doesn’t matter.

That said, playing ‘freerolls’ (games without a buyin that you just play for fun or some cheesy prize) are not helpful. If there’s no money at stake (or something of material intrinsic value to you) then no one will take the game seriously and the people you play against will mostly be terrible players from whom you can learn very little. Don’t waste your time on freerolls unless it’s one of your very first times and you just want to practices the motions of the game.

Finally, the most import value you will get out of playing poker with other founders and investors is relationships. This is why I want you to play poker. Startups are hard. Every founder needs help. You need help. In my experience, most of the best help a startup founder gets comes from people she knows. And the best sources of help are other founders. 

No one disputes that having a strong network is a valuable asset for a founder. Playing poker with founders and investors is a fantastic way to grow the reach and depth of your network. I can’t image a better way.

Shuffle up and deal.