(FYI, the first three paragraphs, from a content perspective, are all ‘gotcha’ moments and are irrelevant to the lesson one would probably take from this blogpost. Feel free to skip to paragraph four if you don’t need the extra context.)
Yesterday, a good friend of mine invited me to an intimate event he was putting together for experts to share their insight around a particular problem in today’s society. If he’s reading this blogpost, he’s going to insist on the fact that I’m a co-host. A title I’m embarrassed to take on since he does 99% of the work of why this event is as thoughtful as it is every month he does it. But I digress.
At the very end of the event, my VC buddy who came, came up to me to ask for some advice. “David, I host these poker nights every month for about 30-40 people. But I would love your thoughts on how I can make this event format more engaging and also unique, like the way you host your events.”
Spoiler alert. I never gave him a good answer to that question. So, if you came for that answer, joke’s on you. Or if you really want an answer to that, DM me, and I’ll share my thoughts.
But what happened after was quite interesting. My buddy who hosted the event last week — let’s call him, Danny — posited that poker was a particularly bad activity to do for an audience of founders and investors. Why? Lying is not a practice investors want to encourage in the founders they’re backing. The worst thing that can happen in a VC-founder relationship is that you find out the company is dying when it dies because the founder couldn’t be honest with you sooner. You want a clear line of communication between investors and founders all the time, so investors can help you course correct if they see you heading down the wrong road. And poker is a game that encourages lying.
To which, I agree from the angle of VC to founder relationships. Even personally, I don’t jump in any investor-investee relationship if I don’t think that investee (be it GP or founder) cannot be honest and vulnerable with me in the moment or in the long run.
My other VC buddy — let’s call him, Josh — countered with the fact that yes, poker does encourage you to lie, but most people he plays with have a clear separation of church and state. They know that poker is a game. And as a game, the behavior that is exhibited under such rules stays in the game. What happens in Vegas stays in Vegas.
At the same time, while poker isn’t really the game to play to be vulnerable, Josh said that poker is a great environment to see how a founder reacts to stress. As well as, how they deal with the hand they’re dealt, figuratively and literally. You get to see if a person is risk-averse or risk-taking. Under what conditions? And when their competitors get aggressive, do they step up to the challenge or take a back seat. Do they spend time looking at their hand or analyzing their environment?
Again, also a lot of merit to what Josh said.
Then, ensued a bit of back and forth.
In my opinion, they’re both right.
In my experience, most founders don’t lie easily. While I haven’t done any market surveys if founders are more likely to lie if they play poker versus if not, I also believe that most invitations to poker nights among closed circles stay in closed circles. In the sense that most poker hosts pre-qualify if a person is a high integrity individual before they invite a guest to play poker. So in other words, a high selection bias.
People are more prone to lying or hiding facets of the truth when their ego is attacked. When something so core to their identity is questioned and put at risk. The higher the stakes, the more likely someone is to lie. In most poker games, and with sane people, the bets never exceed a meaningful portion of someone’s net worth. They’re not risking tomorrow’s dinner on the table.
Admittedly, in games where the primary adversaries are the other people present there, one is less likely to have opportunities to be vulnerable. Like poker.
On the other hand, in activities or games where the primary adversaries are themselves or the environment, there is no need to hold pretense. As such, people are more likely to be vulnerable. And have opportunities to be vulnerable. Like pottery, or glass-making, or maybe even golf.
That said, humans are creatures of comparison. We tell ourselves narratives that prescribe meaning to our actions and the actions of people around us. So even in the latter situations where the primary adversary is either themselves or the environment, you want the variation of proficiency levels to be low. In other words, each individual’s proficiency level needs to be as close to the median proficiency level as possible. Or what many will call, levelling the playing field.
For instance, let’s take painting. Painting is a skill where the dispersion of proficiency in the world is rather high. Some people exhibit the talent of Picasso or Georgia O’Keefe. Many others are happy with a decent looking stick figure. If the activity is art, one way to level the playing field is that everyone is blindfolded. Each person loses a sense that is quite crucial to their ability to produce great art. A handicap that instantly brings the variance very close to zero.
Take another example. Golf. Another sport where skill levels may differ drastically. One way to collapse the variance function is simply to have everyone swing with their non-dominant hand.
The goal here is not to only handicap the skilled, which may lead to passive aggressive discontentment. The goal here is to handicap everyone and help everyone divorce themselves from tying the result to their ego.
I’ve always optimized for activities and event formats that help people bond. If you search up ‘social experiments’ on this blog, you’ll see exactly what I mean. I love events that elicit curiosity, as opposed to competitive spirit. Maybe it’s to atone for my own competitive spirit. Knowing that if I have the chance to compete, I will. And well, sometimes, when I’ve set my goal on winning, I can be a misery to be around.
P.S. I appreciate all founders and investors who have invited me to poker nights. While I have played in a few, I can confidently say that I suck. I have a terrible poker face. 🙂
P.P.S. For my readers that are way wealthier than I am — you know who you are — I cannot afford your million dollar buy-ins at the table. That is just way too much funny money I do not have.
Photo by Keenan Constance on Unsplash
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The views expressed on this blogpost are for informational purposes only. None of the views expressed herein constitute legal, investment, business, or tax advice. Any allusions or references to funds or companies are for illustrative purposes only, and should not be relied upon as investment recommendations. Consult a professional investment advisor prior to making any investment decisions.