Taking Risks on Life’s Journey

The first thing to understand about betting on a roulette table is that when you bet red, at the simplest level, the casino is betting black. And neither is more likely than the other. Indeed, according to some people’s definitions of the word, casinos are “gambling” in the same way that their punters are.

They’re not, of course, which is why most people use the word “gambling” incorrectly and why we need to calibrate our terms when we talk about this complicated but fascinating subject. Every time the wheel is spun, however, uncertainty reigns and nobody but nobody can tell you with any certainty what the result is going to be. It is the visibility of uncertainty in a casino – as opposed to its often invisible nature in life – that makes it such a wonderful little laboratory in which to study the way people that people react to it.

As a young man I never took drugs, bungee-jumped or even placed a bet. Activities associated with risk just never appealed to me. Then, aged 26, – quite out of the blue – I quit my job as a reasonably successful writer for film and television to become a professional poker player.

This was long before poker became the multi-billion dollar industry that it is today. In 1999 poker was the preserve of a few eccentrics and iconoclasts who had either never known any other “career” or who had dropped out of one because it wasn’t offering them the thrills they dreamed of as a child. I guess I fell into the latter category.

With hindsight, it was the best career move I ever made. I learnt more from three years in Las Vegas than any other single formative experience. Playing poker for 10 hours a day 6 days a week for three years certainly taught me a thing or two about risk and just how little most people understand it.

Most people assume that – as a professional poker player – I was a gambler but the fact is that “gambling” is the act of placing a bet where you have the worst of it. In the long term, if you “gamble” you will lose money. Playing poker professionally is not about gambling but taking a series of “calculated risks” with the aim of making a healthy long-term profit at the end of the day.

Isn’t that the aim in business too? What poker players call “bets” business people call “investments” but the uncertainty is still there. We live in an increasingly uncertain business world where it is impossible to guarantee the outcome of anything.

In my seminars I demonstrate how to bet on the roll of a die and make money – even though you lose five times out of six – and explain why professional sports bettors aren’t looking for the horse most likely to win. The implications of that often changes the way people view risk forever.

Operating a business in the knowledge that you will be profitable in the long run, even though some of your investments will fail, is something that the best companies in the world have known for many years: companies like 3M, HP, and Google have created cultures that encourage risk taking and accept failure as a necessary part of their calculations. They don’t sweat the short term any more than a casino manager sweats when someone wins a lot on roulette in one evening: they know that the house will bust them in the end, just as the great company knows that great ideas will always be produced by a healthy culture of innovation and adaptation.

After three years in Vegas I came home to England and effectively became an entrepreneur. I know that I could not possibly have done this without the knowledge and skills that poker gave me and it is a pleasure for me to foster discussions around this whole area with people in business today.

Posted 12:27pm by Caspar and filed in Risk, Uncertainty

Risk Taking in Poker Business and Life

The future is uncertain. For all of us. Hopefully one of the positive things that we all might take from the “current financial crisis” is the numinous truth of that thought. Perhaps understanding that even the money we have sitting on deposit in our current accounts is not 100% safe will serve us all well in the long run.

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Posted 01:23pm by Caspar and filed in Risk, Uncertainty