How Poker Impacts Being a VC
Applicable learnings from seven years of poker and three years of venture
A common question I get asked by both founders and investors after I share that I used to be a professional poker player is what lessons from poker are most applicable to venture capital.
Almost everybody has heard of the Annie Duke book and the made-up phrase of “resulting” that no one in poker ever used, but after nearly three years in venture, I’ve distilled down a few core ones that seem most relevant to me in practicing the craft:
Deconstructive Learning: the best way to learn something is to break it down to its most simple concepts and then layer complexity on top of it rather than trying to learn everything at once. For spelling, I started with Latin and Greek root words. For poker, this question could be “what are ranges and how do I use them in various positions?” For VC, it might be: "what makes an excellent founder?" If you look at my writing, many of the early topics after I became a VC center on that question. That’s what I became most obsessed with and thought about all the time. After you begin to develop a core opinion on this question, you can slowly layer on other aspects like "why now,” business models etc. Rather than have a surface level understanding of everything, you have a deep understanding at each layer of the stack as you go upward. You may need to learn the other aspects to be conversational with your peers, but try to truly be first-principled about learning.
Inputs matter more than outputs: the idea that Annie Duke made popular. Decision-making is only improved through studying the quality of your inputs, not just what the result was. Often in poker you would make the right decision and still lose. The way to improve was just to focus on your decisions based on the information you had at the time, not hindsight bias. The feedback loops in poker are quicker than venture which makes assessing decisions much harder, but it’s critical not to over-rotate on results, especially short-term ones like markups.
Learn the rules to break the rules: there are no rules in the moments of highest leverage that matter most. In poker, learning fundamentals of strategy and the theory that the best players were adopting was important, but the best players also knew when to leave that theory behind. Often, the most important moments were where you needed to do just that. Investing is the same: you need to know the themes, the ideas, the frameworks the numbers that matter, etc. but you also know when to break them, when there are no rules, when pattern recognition leads you astray. Instincts are the most underrated and hard-to-quantify part of early-stage investing.
Beginner’s mind: the best VCs are constantly learning and focused on continuous improvement. I used to say “If you don’t think you sucked at poker 6 months ago, you’re not working hard enough.” Venture might not move as quickly, but the people who are most open-minded, curious, and hungry even after decades of doing this are the ones who have staying power. Most VCs get stale and set in their ways over time. The best like Vinod Khosla are continuously exploring their curiosity, never complacent, and always excited to learn and invest in new technology breakthroughs. Many years into the job, he’s still ambitious enough to invest in both OpenAI and companies doing xenotransplantation. That’s range, that’s curiosity, and that’s willingness to continue the learning journey even decades into the job with outstanding success.
The best play is an expression of yourself: the best players or investors are ultimately expressing themselves, not aping somebody else. You can learn from mentors, advisors, study the greats in your field etc, but to become original and insightful, it needs to be an expression of you. Investing is the same. You will make your best decisions when you are expressing the core of who you are through the art. It's not about being the smartest or knowing the most, although you need to be smart and competent. It's about being able to be an unblocked creative performer who has the fluidity to make high-quality and high-impact decisions at the few crucial moments that matter every year.
If you’re a founder pushing the boundaries of conventional wisdom, living unconstrained by rules, and building the next category-defining company, reach out pratyush [at] susaventures [dot] com. I promise I won’t tell you what to do, but I will try to ask you good questions.