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12/30/08 Update: Wrote follow up post: Poker, Business, Life: It's Never Too Late to Change Tables

EVALUATING MARKET OPPORTUNITIES

  • Table selection is the most important decision you can make.
  • It's okay to switch tables if you discover it's too hard to win at your table.
  • If there are too many competitors (some irrational or inexperienced), even if you're the best it's a lot harder to win.

MARKETING AND BRANDING
  • Act weak when strong, act strong when weak. Know when to bluff.
  • Your "brand" is important.
  • Help shape the stories that people are telling about you.

FINANCIALS
  • Always be prepared for the worst possible scenario.
  • The guy who wins the most hands is not the guy who makes the most money in the long run.
  • The guy who never loses a hand is not the guy who makes the most money in the long run.
  • Go for positive expected value, not what's least risky.
  • Make sure your bankroll is large enough for the game you're playing and the risks you're taking.
  • Play only with what you can afford to lose.
  • Remember it's a long term game. You will win or lose individual sessions, but it's what happens in the long term that matters.

STRATEGY
  • Don't play games that you don't understand, even if you see lots of other people making money from them.
  • Figure out the game when the stakes aren't high.
  • Don't cheat. Cheaters never win in the long run.
  • Stick to your principles.
  • You need to adjust your style of play throughout the night as the dynamics of the game change. Be flexible.
  • Be patient and think long term.
  • The players with the most stamina and focus usually win.
  • Differentiate yourself. Do the opposite of what the rest of the table is doing.
  • Hope is not a good plan.
  • Don't let yourself go "on tilt". It's much more cost effective to take a break, walk around, or leave the game for the night.

CONTINUAL LEARNING
  • Educate yourself. Read books and learn from others who have done it before.
  • Learn by doing. Theory is nice, but nothing replaces actual experience.
  • Learn by surrounding yourself with talented players.
  • 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.
  • Don't be afraid to ask for advice.

CULTURE
  • You've gotta love the game. To become really good, you need to live it and sleep it.
  • Don't be cocky. Don't be flashy. There's always someone better than you.
  • Be nice and make friends. It's a small community.
  • Share what you've learned with others.
  • Look for opportunities beyond just the game you sat down to play. You never know who you're going to meet, including new friends for life or new business contacts.
  • Have fun. The game is a lot more enjoyable when you're trying to do more than just make money.

I'm working on writing a fun poker/business book titled Everything I Know About Business I Learned From Poker. It's meant to be a short, fun, light-hearted book.

Please let me know what you think of the outline above and if you have any suggestions for other points I should include!

Also, I'd really like to include in the book real-life poker stories and business stories as they relate to the bullet points above. If you have any fun or interesting stories you'd like to be considered for inclusion in the book, please share your story by commenting below or emailing me at tony(at)zappos.com.


Thanks!

Tony Hsieh
CEO - Zappos.com


12/30/08 Update: Wrote follow up post: Poker, Business, Life: It's Never Too Late to Change Tables

Tags: ceo, poker, book, business, tony, hsieh

Comments

ZC27713 27 Dec 08 at 10:17AM

Tony...

that looks like a great outline of a book I will definitely enjoy reading. Seeing what you know about business tells me that you must also be a great poker play. I love poker and business, so I'll be sure to read the book when it comes out!

  • Leo Reiter

ZC27718 27 Dec 08 at 10:52AM

Tony, nice post.

I might suggest one other point under EVALUATING MARKET OPPORTUNITIES...

  • If there are too FEW competitors, then there may be no opportunity at that table.

Jason
http://twitter.com/swarmforce

ZC24681 27 Dec 08 at 11:13AM

Tony,

Very interesting post. I would also offer a suggestion, since you are basically talking as if you were at a casino; you should also add under strategy "Bring your own table". As in starting a while new game, there are plenty of business that are total "game changers".

I look forward to the book.

Joe
@infodude

Rodney 27 Dec 08 at 12:21PM

Nice article, Tony (and sounds like a fun idea for a book).

Here's my 2 cents:

Know your niche and rock it.

There are many different types of poker. No limit poker is not for everyone, but that doesn't mean you can't be the best Omaha Poker player ever.

In business, you don't have to take on amazon, or be "the next" anything. Find a niche that you are passionate about and be the best at it so that people want to be "the next" you.

ZC27776 27 Dec 08 at 06:50PM

Hey Tony,

Great post and idea/outline for a book. It's definitely interesting to explore the parallels between business (or life in general) and strategy based games like poker, blackjack and chess.

I spent a few years playing blackjack at a statistical advantage and the one thing that I learned was to trust in the system that I studied for so long. I believe this is true for business as well. If you've put in the time and research to develop a solid plan, no matter what kind of variances happen, you have to believe in the analysis that you've already put in and stick to the plan.

The toughest part during my blackjack sessions was riding through the inevitable down swings and sticking to basic strategy and keeping the count. There was more than one session where I doubted the math and overall strategy and was ready to quit. But I stuck through it and in the long run achieved my expected value and verified all the math that was crunched from the beginning.

I think a bunch of your points covered this area, but I thought I'd share my experience. Good luck with the book and with Zappos! Look forward to more of your tweets.

Brent
http://twitter.com/brentium

ZC27787 27 Dec 08 at 09:12PM

Tony,

It's a decent thought for a book.

The major issue I see with this is the (how to put this...) less-than-expert-understanding you have of poker.

I'd be concerned that you'd draw conclusions that don't necessarily make sense with the analogy you choose.

Some specifics:
1. It is not harder to win versus the inexperienced. This is a fallacy that many novice poker players cite as an excuse. (Don't trust me? Sklansky wrote about this.)
2. "Act weak when strong..." This "opposite" strategy is one trick you can use on a given decision. "ABC poker" (wysiwyg) is no less 'correct'. It's the mixture of these tricks/methods that can define a strategy. How that applies to your book...

The other sections are kind of silly to me personally, but many of the principles do apply.

While it's touched upon tangentially in those "other sections" I would emphasize that in the short term in poker you cannot be results oriented and therefore cannot learn from experience (due to typical variance.) I'm not sure how you will reconcile that in business it is wise to be results oriented in the short term (unless you are defining short term as days.)

Besides the usual rundown of poker books, I'd suggest reading Tommy Angelo's Elements of Poker. I'm not sure the book you want to write can exist, but before you write it, you need a few more years of poker or some good advice.

ZC27794 28 Dec 08 at 02:19AM

All you need is a chip and a chair.

Don't play with scared money.

Cash is king.

Beginning with a good hand does not guarantee success. Flopping a str8 in hold em w/9 opponents, makes your chances of winning only about 50%.

When evaluating an action, never add sunk cost into the equation. Think of the money you invested in the pot as no longer yours. All decisions should be based on marginal expenditure.

ZC27796 28 Dec 08 at 04:05AM

Tony,

I completely agree with the 6th comment.

One of the most important things that I have learned is that the game of poker is stochastic. Which makes almost any static theory inherently flawed. This is why I personally believe accurate opponent modeling is a key component in becoming a successful poker player.

ZC24179 28 Dec 08 at 05:06AM

Hi Tony,

Great idea and analogies for a book! I liked one of the previous comments:

"Know your niche and rock it."

Will think of other thoughts and let you know.

Emmanuel
Motivatorman

ZC27809 28 Dec 08 at 06:40AM

As a group of young entrepreneurs, this concept really speaks to our design firm. One of our partners is a heavy poker player and always throws in analogies as we continue our search for the greatest clients.

This is a fantastic opportunity to hit a number a number of audiences that stretch beyond the young & old entrepreneurs as well as polished suits and even musicians. Wonderful little light bulb - a great deal of people will find these philosophies true to life.

Stacey Dyer
Creative Director
Triple Frog

Let your brand run! http://triplefrog.com

kel kelly 28 Dec 08 at 08:42AM

great post tony! who needs a sandbox when you have poker. ;)

ZC27863 28 Dec 08 at 10:22AM

Tony,

We have such admiration for your company. Perhaps the most interesting thing about it is how consistently your employees treat the customers: well.

Far too often with companies the treatment customers receive varies--and usually wildly at that--from employee to employee, which leads to massive differences in the experiences customers have.

Being consistently excellent is actually much easier than being consistently inconsistent.

Seems this bears mention in your list: play consistently. Don't blindly play with exactly the same strategy regardless of the game and regardless of competitors, but do play consistently.

Thanks for a great blog. Here's to a great 2009 for you and Zappos alike. :-)

Kevin
http://www.airmattresskings.com

ZC27870 28 Dec 08 at 10:30AM

This is an excellent book idea.

Based on my limited experience in both business and poker, I would add:

In the words of Kurt Vonnegut, you are who you pretend to be. Therefore, you should be careful who you pretend to be.

In other words, you are who your customers think you are, just the same way you are who the other players think you are. If you constantly bluff, people know it, and if you never bluff, people know it. And if you promise customers something, and fail to deliver it, they are not going to believe the next thing you promise.

ZC27913 28 Dec 08 at 02:29PM

Great idea. Some of the major trading firms (Susqueahanna sig.com the largest trader of Nasdaq options, based their decision making and hiring on poker game theory)

I think this has the possibility to be a very high level "way of thinking" about poker and business that allows each to reflect concepts that are mutually applicable and clearer by virtue of being viewed across two disciplines.

A few examples ....

Evaluating market Opportunities

1. An opponent on tilt ---- a competitor struggling with a recent set back - big opportunity to capitalize, gain market share, purchase assets below cost.

2. An action player at the table (sit on his left and re-raise to isolate him {limit} or sit on his right and check raise in NL}) -- a competitor is spending a great deal to open a geographical area or new niche market - piggyback on his campaign.

Marketing and Branding

a tight table image allows you to steal when needed, and a loose image gets you paid off when you shouldn't -- a strong market image allows you to dominate competitors, price advantageously and utilize loss leaders.

Financial

A strong bankroll at the table allows you much more control and flexibility than a short stack -- witness this current economic downturn - the financially strong companies will maintain their marketing and grow market share, their financial strength will present innumerable opportunities for acquisition, expansion and entry into new markets.

Strategy

1. be mindful of every hand you have played in the session and the perception your opponents have of you and you of them - in poker this will definitely produce big opportunities - your opponents will remember your previous actions and base their assessment in the future on recent history. In business, your customer will depend on your predictability and your competitor can be lulled to sleep by it - falling prey to your growth when they least expect it.

2. Be patient, calm and focussed- you will get your fair share of hands, you will notice opportunities to steal hands, you will make good folds ... if you have a long term view. In business, we have seen the great detriment of short term thinking vs. long term strategic planning, being reactive as opposed to PRO-active.

Culture

1. Have a philosophy, an integrity and character that provides the stability for game play when things are going badly - bring the same philosophy and integrity to the corporation that inspires and motivates the team to achieve, particularly when faced with difficult issues or choices.

2. As a company leader, share the vision with employees and allow them to perceive the importance of each of their roles to the execution of the goals and mission of the company g --- in poker, have a thorough understanding of all aspects of the game, the history, the rules, the etiquette and be the most comfortable person with themselves (not arrogant or overconfident) at the table

Love the idea.

TC

ZC27958 28 Dec 08 at 05:58PM

Tom Schneider is a professional poker player and former CEO, and COO(iirc) of Karsten PING in Phx, AZ. He wrote a book called "Oops! I Won Too Much Money" It's very similar to your idea. Lots of business, and life, principles extolled through poker anecdotes and analogies.

ZC27961 28 Dec 08 at 06:35PM

nice book title but you are not a very experienced poker player so the book won't be "authentic"...

how about this title:
Everything I Learned About Business I Learned By Walking A Mile In Your Shoes

ZC27990 29 Dec 08 at 04:25AM

Great article Tony. I'm going to make a blog post about it now: http://grindblog.blogspot.com

I would be very interested to speak to you about developing this into a book. You might checkout (if you haven't already) The Poker MBA by Greg Dinkin.

This David Sklansky article I posted to my blog also meshes well with this:

http://grindblog.blogspot.com/2007/09/poker-is-good-for-you.html

I've written on topics very similar to this on my blog for years. Here are some relevant posts:

http://grindblog.blogspot.com/2006/02/just-do-it.html

http://grindblog.blogspot.com/2006/01/playing-poker-for-living.html

http://grindblog.blogspot.com/2006/04/winning-mentality.html

I've parlayed my poker knowledge and profits into a small web-empire and much like your title, credit nearly everything I've learned and all of my success to what I learned from poker.

For me the single biggest thing that helped me which you don't get into nearly enough here imo, was networking.

Until I established a close circle of the right poker friends and we all shared ideas and secrets, my game did not reach the highest levels.

Business works much the same way. Until I met and collaborated with the right people I was not able to take my business game to the highest levels (or even be much of a success at all).

Cheers and Happy New Year!

-William Franceschine
grindblog at gmail dot com

ZC28016 29 Dec 08 at 06:43AM

Tony -

Started following your blog this month and have thoroughly enjoyed it and getting to know more about the inside of Zappos.com.

As a new business owner for less than one year, I can really relate to this article. Great analogy!

Tina Marker
Windward Design Group
www.windward-design.com

ZC28033 29 Dec 08 at 07:36AM

There's probably a whole chapter on utilizing your poker skills for negotiations...

Otherwise, great foundation to work with!

ZC28043 29 Dec 08 at 08:30AM

Hi Tony!
You would think after living in Vegas for 18 years I would know how to play poker! Alas,...I know only enough to know I should not play the game--and there is a reaon those casinos are sooooo big! LOL! With that said--your advice (and book subject) provides a strong guideline for succeeding in any business--and in fact in life.

I was a first time user this Christmas,..and must admit I was a bit sceptical. If I had to make a comparison--you guys are the "Southwest Airlines of the online shopping industry"....I was amazed! I received my orders within 48 hours. Wow!!!

Perhaps I should take up poker! Much success to you with your book! And thanks for the fabulous online shopping experience.
Warm Regards,
Jenney

ZC28043 29 Dec 08 at 08:37AM

Toney--one more thought--perhaps to add to your poker outline.

"The people at the table are not the only ones watching"--the game or how you play!

Short and sweet...
Jenney

ZC28099 29 Dec 08 at 03:10PM

Dear Tony:
Love your outline, and look forward to the book.
You present a lot of not only business "truths" but LIFE "truths".

I hope people read it and take your advice.
Love buying shoes on Zappos.com too smile

As a long-time shoe salesperson, I think you've got teh best deal going! I send all my friends to your site.

Wishing you only the best!
Kim Rogers

Twitter.com/kimrogers/

ZC28156 30 Dec 08 at 06:19AM

Tony,

Nice list. A couple more thoughts:

Be nice to the people who are giving you money. In poker and in business, repeat customers are king and you want them to like paying.

Listen to what people say, but focus on what they do.

Know what motivates people.

Finally, a quote from Finley Peter Dunne: trust everyone, but cut the cards.

Good luck with the book.

Your namesake,
Tony

ZC28160 30 Dec 08 at 06:57AM

Tony, this is a great project as i already dmed you on twitter.

Here are my two cents:
http://www.philippschilling.com/2008/12/poker-from-a-different-perspective/

Have a blast tomorrow night, damn, i wish o would be in vegas for new years eve...and please change your privacy settings, although you guys dont ship to europe yet, there are already fans of your mission that would like to comment in this blog. fake accounts suck ;-)

all the best, philipp

ZC30075 14 Jan 09 at 11:50AM

Tony, I'm looking forward to reading what becomes of this project. I read Tom Schneider's similar book and found it great -- much more worth my time than a typical "strategy" book ... because it applied to so much more. It was about how you should think in certain situations.

The subtitle, btw, is "Winning Wisdom from the Board Room to the Poker Table".

Clearly this is knowledge people want. and poker provides such an understandable metaphor for it all.

ZC43052 19 Apr 09 at 02:28PM

Tony -- one of the things I've read about you is how much you learned from your last company. Even though you successfully sold it, you have said that one of your biggest mistakes there was not creating the culture you wanted the company to have. I think in the continual learning chapter you should write something about "Learn from your mistakes."

ZC50814 22 Jun 09 at 01:26PM

If I may add one:

Always drink less than the other guys at the table.

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