July 11, 2007

More Important than Excellence

What's the most important skill in playing poker, if you're looking to make the most money?

When I ask other poker players this, I get answers like "bluffing", "reading other players" or "knowing the probabilities".

They're all wrong. The most important skill is table selection—choosing what game to play and who to play against. You could be the 20th best poker player in the world, but if you spend all your time playing against the top ten players, you're going to lose money. Similarly, you can be a mediocre player and still be rolling in dough if you find and play against players you can beat. "Better" and "worse" isn't the only measure. Some people play well against certain styles of play (for example, you might play well in a game where your opponents bet and raise a lot, but not have the skills to adjust to players who play tighter). The most important thing you can do is put yourself into a situation that optimizes your chances for success. Only after does it become important to execute well. Only then do the skills of the game of poker come into play.

This isn't just a lesson for poker; it's also true in business. One of the tenets of venture capital is that it's better to have a bad company in a good market than a good company in a bad market. I know that while I think I'm an excellent software engineer, I've made more money by being in the right place at the right time than I have solely through engineering skill. (Of course, an excellent track record of success has given me the opportunity to be in the right place at the right time.)

I think this is also a valuable reminder that it's frequently not obvious what the rules that govern success are. For example, you might invest in a company because you think their product is insanely great, but it turns out that the important skill they needed to be successful was actually business development, not creating great products. Sigh.

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