Lessons From The Felt (Part 1)
It turns out that mistakes in poker and sales look awfully similar
“Before every game, say the following: I can defend myself from my opponent, but who will defend me from myself?” - Tom Wiswell, “The Education Of A Speculator” (Niederhoffer)
Poker and sales are both games of incomplete information. Whether it’s facing an all-in on the river from an opponent that’s checked their way through a hand or figuring out how to respond to a sudden aggressive discount demand from a prospect that’s previously been cooperative and interested, poker pros and sales reps alike are balancing what they know, what they don’t, and the complete unknown to make an educated guess about how to proceed.
In both domains, participants make the best decision they can with the information available to them, and at no point do they have the luxury of acting on 100% complete information.
It turns out the felt has a lot to teach about sales (and not in that goofy “here’s what my dog coming home with a dead squirrel taught me about B2B sales” way)
Here are three rookie mistakes in poker—and how they map surprisingly well to similar errors in running a sales process.
Playing too many hands
One of the first things you learn as a poker player is that you’re probably playing too many hands.
After all, nobody’s sitting down at a table not to play, and it can be hard to resist playing marginal hands, particularly when it feels like you’ve been folding all night.
Worse, any one overplayed hand may not cost you, but viewed in aggregate, overplaying junk quickly becomes a significant leak in your game.
Spending time with unqualified prospects is the same. It’s easy enough, particularly when your pipeline is light, to shrug your shoulders, say “it’s just 30 minutes,” and run a demo to an unqualified prospect - just like playing a weak hand, it’s easy enough to justify in a vacuum - but do that enough times, and before you know it, you’re spending your days following up with and chasing “deals” that are anything but.
In both cases, the direct costs are small enough to justify, but the real pain is in the indirect costs: Every dollar bled from overplaying small hands is a dollar that can’t be allocated to a strong bet. Every hour spent following up with people who will never buy from you is an hour not spent following up with people who will.
The answer in both cases is the same: Know your strike zone, protect it, and when in doubt, ditch the marginal hands.
Not playing hands aggressively enough
Spend enough time with a poker player, and the word “solver” will inevitably come up.
“Solvers” are the calculators of the poker world - computational engines that run through every possible situation or “line” and tell you what to do in any given situation.
You’re on the button, and highjack raises? It turns out that you should 3-bet with about 9% of your range, call with 3.5%, and fold the rest.
Curiously, the correct answer here in most cases is to either put up or shut up: Simply calling puts you in a purely reactive state. Any decent player who raises first in from late position will do so with a wide variety of hands, ranging from suited connectors to pocket pairs to substantial broadway holdings, and absent challenging the strength of their hand with a re-raise it’s impossible to put your opponent on a range and see how serious they are.
In the same way that passivity doesn’t pay off in poker, continuing to send meek “just checking in” emails is the kiss of death for any deal cycle - you learn nothing, the process drags on and on, and the deal eventually dies anyway. Take a page out of Chris Voss’ book: “Have you given up on this?”. “Go for no” isn’t a new concept, but reps often are too afraid of rocking the boat and losing a deal.
Sticking with shitty hands for too long
As the incomparable Justin Middleton is apt to say: “Hope is not a strategy.”
Unfortunately, humans tend to a pernicious combination of confirmation bias and sunk cost fallacy.
“Well, I already paid my blind..might as well pay to see the flop” we rationalize while looking down at 92o - doubtless replaying the memory of that one time 5 years ago we flopped a full house when the flop hit 992 while conveniently forgetting the 600 big blinds we lost in the same amount of time playing shitty hands.
The flop comes, and we brick it—villain bets.
“Well…it’s only a few dollars to see the turn. Maybe I’ll hit there…”
It’s a tale as old as time, but we call them classics for a reason.
“I know their team is a little bit small…But I already met with them, they seem interested, and we worked with that other similar company, and it was great,” we tell our skeptical VP.
The best time to make a good decision is the first time you’re given the choice.
The second best time is the second.
Don’t let having made a shitty decision before stand in the way of making a good decision now.
Conclusion
Games of incomplete information are fascinating domains for exploring probabilistic thinking.
In most cases, we’re forced to confront the truth that we’re not as rational, as disciplined, or as consistent as we fancy ourselves, and games hold up an objective mirror that allows us to become better versions of ourselves.
As far as generalizable axioms for life, it’s hard to beat what we’ve discussed today:
Be selective in your participation.
Once you decide you’re in, act with strength and conviction.
If you realize you’ve made a mistake, it’s never too late to get out.