Entrepreneurs: Play Your Startup Like A Poker Hand
It’s safe to say that most startup entrepreneurs are natural-born poker players, in that they are not averse to taking risks. Mark Pincus is the CEO of Zynga, the world’s largest social gaming company. He was recently interviewed by Vator.tv’s Bambi Francisco and was asked to outline some of the lessons he has learned as a successful startup entrepreneur.
Mark suggested that startups should play their startup business like a hand of poker. Knowing when to fold and when to go ‘all in’ is the key. He outlined several important lessons that startups should be mindful of, here are a couple of his main points;
a) Get your ‘macro’ right. Pincus suggests that getting your macro focus right can afford you some extra latitude when it comes to executing your business strategy. If your macro focus is in the right place, you have a greater chance of stumbling into a good business. If you get it wrong, good execution won’t be enough to make your business successful.
b) Birth a project not a company. The notion of starting with a business plan and seeking funding may not be the best way to begin your business. By treating your startup like a project ie, a poker hand, you can invest less time up front and be quicker to fold if the feedback/research indicators are not positive. Folding is not a bad thing, and in many cases with startups, the inability to fold quickly can and does cost many entrepreneurs a lot of excess time and money. Once your project gains some momentum and you feel it is a winning hand, that is the time to pounce and go ‘all in’.
In addition to Mark’s point about not starting with a business plan, there is new research data that supports the notion that business plans may not be worth an entrepreneur’s time, especially in the early stages and/or when seeking funding. However, it should be noted that many venture capitalists and some seasoned entrepreneurs would likely disagree with these conclusions.
“Spending time and energy tweaking your business plan is a waste of resources,” said researcher David Kirsch, associate professor of management and entrepreneurship. “It’s a limited-use document that will in no way substitute for the hard work of actually building a business. You’re better off investing in your idea, your social network, finding potential investors, potential customers – the intangibles around your business that are going to make it more likely you succeed. Invest your time in any other business-building activity but working on your business plan.” – Robert H. Smith School of Business
You can watch the full interview with Mark Pincus here:
What is your opinion on the importance of business plans for startups?
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Advice to Entrepreneurs: Perfect the Business, Not the Business Plan
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