What Would Paul Graham Think, About Poker

In a 2010 interview with Andrew Warner, Paul Graham identified “determination” as the primary trait he looks for in entrepreneurs in his selective Y-combinator incubator. Since Y-combinator makes a point of deciding admission after a shockingly brief 15 minute face-to-face interview – Warner then begged the question to Graham: “What kind of things does an entrepreneur do to fool you into thinking that they’re really determined?” Which yielded this surprising aside on poker from Graham:

Matt Maroon, of BlueFly gaming. He was a professional poker player. I mean talk about poker faced, you know? So, he came in for his interview, and he just seemed like, absolutely unflappable. And we thought, “Boy, this guy is tough! This guy is not a wimp.” And actually we were right, he was really tough. To this day, he is genuinely unflappable.

And I probably would want to fund more people who are really good poker players. I noticed, empirically, there seems to be a high correlation between playing poker and being a successful startup founder.

As a poker player, I was immediately intrigued by this “correlation” because, well, Paul Graham is the Silicon Valley startup whisperer. If you know, you know. If not, google “Y-combinator”](http://ycombinator.com/) – arguably the most innovative, influential, successful startup incubator program in the technology space. So dude knows a bit about startups. Moreover, he knows them in the aggregate, having funded over 560+ companies with a total current value of $11.7 billion (including Dropbox, AirBNB, Reddit, Heroku, etc).

But alas, I don’t think he’s a poker player himself, which makes him unqualified to postulate beyond his “empirical” observation (which Warner doesn’t pursue anyway in his interview). Being the poker player, Y-combinator graduate and shameless Paul Graham worshipper that I am, I accept the poker/good founder correlation as stone-cold truth. What intrigues me though are the whys – that is, the underlying casual factors for the correlation.

Hence, ever since I heard PG say the above quote, I’ve gone into “WWPGT” mode: “What Would Paul Graham Think?”

… if he actually played poker.

Going Beyond Granular Analogies

A quick google search will reveal a brimming discourse on the poker/entrepreneur connection1. Most focus on the many analogous and oftentimes sloppy parallels between successful business and poker, usually under a canned headline like, “What poker taught me about business/startups/entrepreneurism”. In fact, Zappos’ CEO, founder and Las Vegas ambassador Tony Hsieh wrote a fairly lengthy post with that exact title, offering up mostly generic business aphorisms, like:

“It’s okay to switch tables if you discover it’s too hard to win at your table.” (Corollary to picking the right market)

“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.” (Corollary to continual learning)

“Don’t play games that you don’t understand, even if you see lots of other people making money from them.” (Corollary to strategy)

“Act weak when strong, act strong when weak. Know when to bluff.” (Corollary to marketing and branding)

All interesting bits of brain candy for your average poker playing businessman, sure. But these are mostly topical and conflated, and fail to address the real causal reasons for the poker/good founder phenomena. Truth is, any game involving any amount of strategy can also be combed for countless metaphorical parallels to business. Both are inherently strategic endeavors that involve expected value probabilities, decision making and negotiation/anticipation with other human beings (amongst countless other similar generalisms). Yet, I don’t see PG making correlations between Setters of Catan and good founders.

To really arrive at a meaningful causal relationship, I think we need to shift away from the internal parallels between the two strategic endeavors. I think we need to both 1.) scope out to the external, sociological environment in which poker exists, and 2.) scope in to the personal psychological shift that poker accelerates in a ready. So while poker might provide a ready-made set of metaphors for a seasoned founder to navigate his own strategic process, I’m more interested in collective behavioral thing that happens with poker players that converts them into would-be entrepreneurs in the first place. If countless games similarly mimic business, what is it about poker that draws future entrepreneurs to its felt tables?


The first thing we should consider sounds stupidly obvious on the surface: availability. Simply put, entrepreneurs are drawn to poker because, well, it’s there.

A staple of American casinos and card rooms, poker is proliferated by a large and profitable network of establishments. Poker comes attached to a humming service industry, where you can spontaneously drop into a meaningful, face-to-face game at any hour of the day. Furthermore, poker is served beyond the strict regulatory boundaries of full service casinos, in stripped down “card rooms” that are formed under comparatively less red tape (e.g. Lucky Chances in Daly City or Oaks Card Room in Oakland).

What other strategic game offers up such a ubiquitous platter of competition? Available without any planning or coordination amongst friends? At almost all hours of the day and night? Within the bounds of legality? With an umbrella in your drink?

The institutionalized distribution of the game renders a large pool of competitors, which lends an objective virtue to the feedback cycle necessary for goal-setting and personal improvement. Alternatively, you might be the best Settlers of Catan player in the world, but how would you ever really know? Your competition in other non-poker strategic games rarely goes past 2-3 degrees of separation along a particularly geeky cluster of friends. It’s hard to get a real sense of your own objective skills in such a limited and isolated pool of competitors, many of whom might curtail the usual ruthlessness they would have unleashed on unfamiliar opponents. And when you become the king of your small hill of Catan players, what could and would compel you to challenge yourself still higher?

And it doesn’t end there – poker not only offers plenty of competitors, but plenty of variations as well. Built into the monied limits of the game are structured, graduated levels of competition. And it’s non-linear. Tired of limit poker? Try no-limit. Conquered that as well? Try the tournament format. Is Texas hold'em getting stale? Try Omaha. And so on and so forth.

What other strategic game comes pre-built with the institutional infrastructure to allow you to continuously rise to an apropos challenge?

Cash Rules Everything Around Me

And that brings us to the 2nd reason poker lures the entrepreneur: cash money. And not in the way you’re probably thinking either. The obvious connection to make is the parallel motivation to win quick money. But it goes way deeper than that. Experienced players know that poker fundamentally changes your emotional relationship with money.

Most other strategic games measure winning/losing by an abstracted spectrum, meaningful only within the context of the game itself. In a first person shooter, you might keep track with “health” scores, or some other linear metric specific to the video game. In chess, your progress is tied to the disparity or positions of your pieces. In Settlers of Catan, the points showing on the board. Compare that to poker, where money is inherently built into the “accounting” of the game itself – no abstract metaphorical jump necessary to understand how this mimics business position.

Secondly, most folks buy into the game via poker chips, “gamefying” the symbolic representation of currency itself. This might sound like a direct contradiction to the above paragraph, but there’s a twist. The chips might convert into cold hard cash at the casino’s cashier at the end of the night, but in-game, the chips/cash exchange at least partially abstracts the notion of money into an apparatus of play; into “points”. This might seem like trivial point to make, and on its surface, it is. But it speaks to a much deeper transformation a good player must make in order to succeed, which is to “gamefy” your relationship with money, and the swings of success and failures it might represent.

You Mad Bro?

Poker demands rational decision making, and there’s nothing like the violent swings of money gained and lost to send a noob spiraling down the emotional wormhole of poor performance. Players refer to this as “playing on tilt”, which occurs when personal emotions unwinds the focus necessary for optimum play. Curbing this inborn human instinct is a huge part of becoming an elite poker player, and even the world’s best players are constantly still monitoring their own tilt.

A large part of learning to minimize tilt is to develop a dispassionate relationship with money. Much of this is tied to the bias of loss aversion. Study after study shows that most human beings are psychologically affected twice as much from loss as they are from gain. So that means most people would feel twice the pain from losing $100 than they would feel pleasure from gaining it. And since poker is a game of expected value, playing with loss aversion bias will eventually lead to bankruptcy, slowly and painfully.

Poker will find plenty of ways to test your faith in expected value. You have to be okay with a sound pre-river decision, even with the maddening hindsight of a bad river beat. You can make 10 correct but losing decisions in a row, and you have to be okay with that in order to make the correct decision the 11th time. If the pot size justifies it, you have to be okay with risking your entire stack with minority % chance of winning. You have to learn to stay loyal to long-term law of averages, even if he takes weeks, months or years to actually average out in your favor, all the while tuning out your reptilian brain’s loud demands to BREAK THINGS AND THROW TANTRUMS NOW NOW NOW!!! The point is, poker presents plenty of opportunities to practice rational decision making in the face of wild and random money swings.

For most sane human beings, these are learned traits, burnished over countless hours of repetition and objective feedback.

Similarly, in business, a good founder needs to be able to significantly reduce their risk aversion and emotional variance to even think about approaching the entrepreneurs’ arena. PG often cites persistence and determination as the primary trait of a successful entrepreneur. In my experience, persistence in the startup arena is often more about how quickly you emotionally bounce back from fails, and less about the pace of milestone successes (which the media focuses on in the hindsight rewriting of a company’s success). So in many ways, experienced poker players are best equipped to take on the startup challenge, as they are practiced at extinguishing a particularly inflammatory kindle of personal emotions – money variance, or even bankruptcy – in the service of rational, focused and disciplined decision making and longterm growth. In this sense, it’s less about the transfer of structured skills – as the current discourse would have you believe – and more about a fundamental rewrite of one’s perspective on success and failure.

Playing Business

I ask you, what other strategic game allows us to 1.) strengthen our rational fortitude in the face of monied variance, 2.) reduce our risk/loss aversion by development of 3.) a dispassionate relationship with money, AND 3.) allows us to practice repetitively, endlessly at 4.) graduated levels of 5.) ever-present competition? I don’t ask this rhetorically, I’d love to find a another good game if there is one, so tweet me your suggestion: @freshbreakfast

But in the meantime, I’m still licking my wounds from the sting of a freshly failed startup. I’m okay with that, twas a good decision when I made it and a great learning experience to boot. So until I have another venture to pitch to PG, you can find me stalking the no-limit hold'em tables at Lucky Chances. Come join me, bring cash, and leave your emotions at the door, because we’re playing business.

Go to Hacker News to violently disagree with me. Follow me on twitter if you only mildly disagree.

Thanks to Dan Tran and Christian Yang for editing.

[1] Links to blog posts on the poker/entrepreneur discourse:



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