Hands Down, There’s Risk in Being Risk Averse
The worst hand in Texas Hold 'Em.
As any avid poker player knows, 2-7 is considered to be the worst starting hand in Texas Hold ’Em. The reasons are simple: these two cards have the worst odds of improving and therefore, any other player at the table is virtually guaranteed to have a better hand. Said another way, these are the two lowest cards you can have that can’t make a straight (there’s four cards between 2 and 7) and even if they are suited, they make for a very low flush. Heck, even if you manage to scramble up a pair from either of them, it’s going to be a pitiful pair.
The bottom line? There’s a high risk that you’re going to lose money by playing 2-7. That being said, it is possible to win with 2-7. But to do so, you must first play it, and that’s really the point of today’s blog post.
If you study the stories of some of the world’s most celebrated entrepreneurs, you’ll find that risk — and luck — are a big part of their early entrepreneurial days. John Paul Jones Dejoria, cofounder of John Paul Mitchell Systems and a reported billionaire and homeless person at various stages of his illustrious life (I wrote about him back on the 25th of January), has said that he, ”…should have gone bankrupt 50 times” in the early days of his career.
Doba’s own Jeremy Hanks (our co-founder and president) has discussed his luck as an entrepreneur on his personal blog, JeremyHanks.com. And Kemmons Wilson, the founder of Holiday Inn, was fond of saying, “Success requires half luck and half brains.”
I’m a bit of a gambler myself and something that I’ve learned is that if you want to win more poker hands, you have to play more poker hands. As an entrepreneur (and there are those who would say entrepreneurship is gambling), I’ve learned that sometimes you’ve just got to suck it up and take a risk.
This doesn’t mean you should pull out your life savings and dump the entire thing into whatever great idea it is that you think you have. Oh, it’s been done by others, sometimes with amazing success, but I would never advocate taking that big of a risk.
I should point out that, if you’re going to go ahead and play 2-7 in a Texas Hold ’Em match, there are several ways to do it. Here are just three of those:
- Go hog wild and bluff like a maniac, putting all your chips at big risk
- Get in cheap, witness the flop (the first three of five community cards that all players can use to complete a five-card hand), and then reassess your risk versus reward
- Observe your opponent over time before taking a chance with a high-risk hand, and then play it in a fashion that will most likely get your opponent to fold to you — or simply don’t play it if your observations indicate your opponent might not fold
Nothing wagered, nothing gained.
In the first case, everybody might fold and you’ll win the blinds and antes. A mere pittance. You’ll have put up a huge risk that’s simply too high for the reward gained. If anybody calls you, the potential reward is great, but you’re practically guaranteed to lose everything.
If you’re incredibly lucky, you’ll get more than one caller, win the hand, and reap a huge reward. But this happens rarely, just as stories of entrepreneurs who risk everything on some venture, yet meet with success in the end. These tales are inspirational, sometimes even legendary, but they are few and far between.
The second scenario is the “get your feet wet” approach. You get in for very little money, observe how things are going, and decide your next moved based on the current situation. You might find that you’re able to bluff in order to win, or that you got lucky and are now able to proceed with a high probability of success.
In business, sometimes you need to take it slow. Entrepreneurs and gamblers are often regarded as risk takers. But the most successful ones are those who fully understand what they are getting into and carefully calculate risk versus reward with scientific observation and study.
In the third option, you are essentially waiting for the right opportunity to arise, then pouncing on it when it does. It requires that you be prepared when that opportunity does arrive. Successful entrepreneurs are hard-working entrepreneurs. They preemptively prepare for success so that they can seize it when the opportunity comes about.
Successful poker players are the same way. The winningest ones don’t just jump from game to game, hoping to get lucky. They prepare by studying the game, looking for an advantage, watching and re-watching videos of their opponents, and developing winning strategies that evolve over time and act accordingly. They learn from their mistakes and they adjust their game plan with each failure.
Additionally, every gambler understands the need to take risks. At some point, every poker player is going to have to play 2-7 if they want to win. Going into business for yourself is a gamble–don’t let anybody tell you otherwise. But if you’re going to do it, you’d better get comfortable with taking risks and even losing every once in awhile.
