I’ve come to notice over the past few years an interesting overlap between those interested in analytics and those interested in gambling. I’ll be the first to admit that I have a long-held aversion to gambling, and at one point actually took vows that prohibited it as part of a mindfulness practice. (They’ve since expired, but I still haven’t participated.) However, I’ve been conducting an inquiry into why this overlap exists, which has led me down an interesting psychological and intellectual pathway worth detailing.
The common theme among many analytics professionals whose work I respect has been an interest in poker, a game of chance, skill, psychological profiling of self and others, good old fashioned razzing your opponents, and calculated risk, among other things. As I thought more about this, I began to see where this dovetailed with both key focuses of an analytics career, as well as an approach to life in general.
Part I: Chance, Skill, and Calculated Risk
Many of us have come from or at some point worked in the world of startups, whether that be marketing technology companies, early employees of the major vendors, smaller agencies, or otherwise. To succeed in this world requires a level of risk-taking and openness to experience that not everyone possesses, with no guarantees of success. Those startups that bend the odds in their favor do so because of factors such as timing of their product launch, the state of the market/competition, resonance with users, the image the company projects, and, sometimes, the personal charisma of the founders and/or spokespeople. Additionally, stock options, often offered to early employees, are themselves a gamble. So much of this is “right place, right time” type of luck, but a percentage of it is skill. VC firms invest in a portfolio of companies, expecting many of them to fail, but making up for it with a few outsized successes.
To succeed in poker requires a similar combination of factors. There are mathematical odds that can be calculated at every step, but there is a human factor that can bend the game in a particular direction. Players that succeed do so because of factors such as the relative inexperience or exploitable qualities of others at the table (state of the market/competition), ability to stay multiple steps ahead and project what others might do (which translates to building an effective user experience, as well as an effective company), and an ability to control how others see them (image/charisma). Ultimately, however, the game is played against the unforgiving master of probability combined with human psychology, which can create winner’s tilt (startups that are unicorns due to some chance factor who then go on to risk everything and lose it all), or bad tilt (startups that have a hard time acquiring customers, acquire a bad attitude instead, and end with the founders throwing in the towel and/or selling the company in a fire sale).
It’s easy to see why someone willing to gamble on a startup (or willing to enter a field that is fairly new and constantly changing) would be willing, able, and interested in literal gambling.
Part II: Psychological Profiling
To succeed in the corporate world requires self-knowledge, as well as an understanding of how to interact with varying personalities and groups. This is actively encouraged, particularly as one approaches the executive levels. The vast array of coaching, personality inventories, and team building boggles the mind (and accounts for a very large industry). There is nothing wrong with this, as there’s value for business and for life in having a realistic assessment of one’s own strengths and weaknesses, as well as how those interplay with those of others. However, this can quickly veer into unproven methodologies, the poppiest of pop psychology, etc.
Skill in poker also involves quite a bit of psychological profiling. As players advance, they are encouraged to assess the others at the table in terms of where they’re from, their tells, their appearance, their demeanor, etc. This can translate into an intuition for how they might behave or perceive the actions someone else takes, which can be exploited for gain. The gain in poker is taking someone else’s [real or theoretical] money, whereas the gain in business is getting others to work well with you. It can also, however, translate to stealing customers from a competitor when a crack is discovered in the façade of their product, which brings us to our next point.
Part III: Razzing Your Opponents
Many companies, particularly smaller ones but some larger ones as well, create a bond among their employees over outfoxing the competition. Any misstep by a competitor is celebrated and viewed as an opportunity to make fun of them (usually off the record), pursue that company’s frustrated clients with the promise of a better experience, or simply enjoy the schadenfreude. Sometimes this translates to the public space, such as John Legere’s direct tweets lovingly insulting other cellular providers in recent years.
Realistically, though, it’s also important not to underestimate the competition, or assume they’re not doing their due diligence on you as well. As humans, we tend to overestimate the amount of success due to our own skill and underestimate the role of luck. This relates to hindsight bias and hyperactive pattern detection. (Very interesting reading the The Atlantic on this phenomenon in general, and in The Sydney Morning Herald as it applies to poker and the stock market.)
In poker, putting others on tilt by finding their buttons is encouraged. Knowing them better than they know themselves and not letting them get comfortable are real strategies. Here we find something likely to be familiar to our aforementioned early startup employees: projecting a larger-than-life image and needling the competition. Brings to mind Salesforce’s early days of staging fake protests and commandeering taxis at competitors’ events.
Part IV: An Approach to Life
So, where does that leave us? What if one isn’t interested in putting real or imaginary money on the line, but finds these concepts fascinating? You might be someone who gambles with their life, which is actually all of us. I don’t mean in the sense of risking death per se, but we all take calculated risks every day (which goes without saying during COVID-19 especially).
To assess our risks and life choices requires the following:
- An understanding of cognitive biases
- Mindfulness of our thoughts
- Realistic odds calculation (e.g. understanding of real-life probability)
- A decision to act
These are solid life skills I don’t hesitate to universally recommend. If poker gets you there, great. My cautions are 3:
- The obvious risks of financial ruin and addictive behavior. If you’re struggling with these, there are resources like this one, which includes a great chart further down on how to satisfy the same urges that cause problem gambling, as well as organizations on the topic.
- The risks to one’s worldview. What do I mean by this? I’ll use the example of when I did a fair bit of karate at one point in my life. This caused me to view every public encounter from the perspective of which escape routes I had and which moves I could pull if someone came at me from various angles. When you have a hammer, everything’s a nail. Similarly, if you view life from a poker perspective, it’s a zero sum game, where intentions conflict and players don’t cooperate around a common goal. “But isn’t life actually like that, Anne?” Not necessarily, though game theory is interesting and includes more than this approach. I find Stephen Covey’s book The Third Alternative an interesting perspective as well if you want to get away from zero-sum thinking (concept here, book here).
- The motivation that gets you to the game. If it fulfills a need for you and doesn’t cause problems in your life, all the better. It’s important to be realistic about what brings you to the table. I’ve seen a pattern where people sign up to break themselves against the odds at times when the rest of their life has gotten out of control. Games can provide a controlled microcosm in which to play out our psychological tendencies, and can be an expression of avoidance or desperation. They can also be a fun diversion.
Overall, my inquiry has led me to a deeper appreciation of the parallels, life skills, and complexity behind the game. I don’t know if I’ll ever play personally or not, but I’ve learned a lot toying with these ideas. If you have experience with these areas, feel free to share in the comments.
Additional articles of interest: