August 24, 2020

Current Obsession

Yup, I've read this book and listened to a dozen podcasts about this book (click here).

Why is it an obsession?

  1. I love poker.
  2. I love probability, which poker is all about.
  3. I love how elements of poker align with business ... bluffing, betting & having a budget.
  4. I really enjoy how somebody with no knowledge of the game was able to become proficient enough at it to make a living better than most of us make at something we've done for decades.
  5. I enjoyed the journey ... playing crappy tables and against average competition and winning ... then sitting at better tables where the buy-ins were more expensive and the competition improved. We just don't do that in marketing/analytics.
The probability observation is probably the biggest obsession ... that you can make all the right decisions and have a bad outcome. Or, you can make all the wrong decisions and have great outcomes ... think of this as the "Macy's Fallacy" of 2014 ... going "all-in" to use a poker term on the omnichannel thesis and then having temporarily positive outcomes ... only to see their "chip count" erode down to nothing ... which is where they are today. They bet, they played terribly, they won via luck, then skill (i.e. commerce skill) won out over time and they lost horribly.

By the way, "betting" in poker directly relates to your "marketing budget". In poker, there are situations where you have half of the chips at the table. There might be a million chips and you have 500,000. The other eight players roughly split 500,000 chips, so they might have +/- $62,500 chips. Say somebody has 100,000 chips. You might have a bad hand, but you can bet 65,000 chips (which doesn't impact you at all) but puts A TON OF PRESSURE on the other player, who now has to decide whether to call, or go all-in, or fold. You get to be a bully. This is what big brands do to most of you. They have a huge marketing budget, and they're making huge bets and you think they're smart and they may not be smart ... they just might be bullying you. Conversely, you are small and you don't have a marketing budget, so you have to "play" your marketing game very differently. Very differently.

In the five-plus months of COVID, I've witnessed my client base play better poker than they've ever played. They've had less information than ever before, and yet they're making better decisions than I've ever seen them make. Why is it that my clients made horrible or safe decisions when business was good, but now that business is unpredictable my client base is making really solid decisions? Well, the answers seem to align with playing poker, in my opinion.

Most important, the book has my mind bursting with thought. If you aren't thinking, you're not going to get much better at business.

In the past three years, this is one of two books that have influenced my work. Here's the other book (click here to buy it).

Both books, interestingly enough, are about outsiders who come into a foreign ecosystem and earn success. The former earned the author a ton of praise without changing the game whatsoever. The latter essentially caused the subject of the book a ton of grief before fundamentally changing football forever.

The applications of both books to the work we perform are self-evident.

P.S.:  In case you haven't noticed, I'm not reading business books. You are free to disagree with me on this topic and that's fine ... I recently purchased a business book about retail from a noted industry expert. The book was well-written, it connected the necessary dots, it charted a course to the future. And through no fault of the author, COVID rendered everything irrelevant. This happens every couple of years in retail / e-commerce, in spite of having a strong set of skills ... your skills become irrelevant SO DARN FAST. We need to acquire skills that come from outside of our industry and then apply the skills with what we know ... in a new way ... like we did when COVID hit.

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