What is the most important asset that a poker business has? This is a question that many companies have had to think about as the industry of which we are part continues to streamline and consolidate. But I think that some businesses are missing the point and getting the answer to this fundamental question totally wrong.
You might say that the most important asset a poker business has is the customers. After all, customers are the source of the business’ revenue and keeping them happy is paramount. If a business loses all of its customers, then there is no business left.
In reality a poker business’ customer base is in constant flux as new players sign up and existing players lose their money or get bored and leave. While there are of course customers who play regular long sessions for years on end, such players are the exception rather than the norm and represent only a small portion of the overall player pool.
The fact is, while you should obviously try your best to keep your customers happy, if the business makes an unfortunate mistake which upsets a lot of players, those players aren’t necessarily gone forever. It's possible to win them back, or to gain new customers to replace them. Customers are a very important, but ultimately replaceable asset.
Good staff, however, are not so easy to replace, because good ‘poker guys’ are hard to find. Many of the people who are genuine poker experts don’t want to turn an enjoyable hobby into a full-time job, or perhaps they are making a good living from the game already and don’t like the idea of a ‘nine to five life’. Maybe they don’t want to move to one of the industry’s awkward locations, and would prefer to stay close to their family and friends. The poker lifestyle is an intoxicating one and it’s not easy to convince people to leave it.
But without poker expertise, a poker business cannot possibly reach its full potential. It’s difficult to make the right strategic decisions for the future of the business if you don’t have anyone on the board that understands the game, and can anticipate the kind of things that players will be looking for in the future. It’s impossible to make good poker room management decisions, such as what kind of ring games to spread, or what a tournament’s pay-out structure should be, or even what new promotions to offer, without a strong understanding of basic poker principles.
Consequently, it never fails to distress me when I hear that there are some companies in our industry that discourage their employees from playing poker. I’ve heard of casinos that don’t allow their dealers to play, and online poker providers that don’t allow any of their employees to gamble at all, perhaps because of concerns that this may result in problem gambling or other issues in their workforce.
This is utter madness. If you were a wine producer, you wouldn’t expect your employees to be teetotal, despite the obvious risks to productivity that come with alcohol. How on earth can you actively encourage your staff to be ignorant of your product? If you make decisions without poker expertise, then you will make decisions that are not properly thought out because you don’t have all the information that you need. How can you possibly know how your poker room compares to your competitors’ poker room if your staff are not allowed to actually play poker? The truth is you can’t, and this will show in a shoddy product with weak promotions and sub-standard support, and cause your customers to become upset and lose respect for the business. The end result for a company’s reputation and success will be disastrous. Businesses that discourage their employees from playing poker will never be at the top of the poker industry, it’s that simple.
In 2010, there have been some key instances where having poker expertise has helped businesses to innovate or respond to a problem quickly. Take the issue of short stacking, for example. Towards the end of 2009 it became clear that this practice, once barely known but now widespread, had changed the way No Limit Hold’em ring games were played online. The resulting dissatisfaction among both professional and recreational players was obvious and acute. The companies with the most poker expertise were able to respond quickly by changing the buy-in structures of the games they offered, and by choosing a new structure that addressed the issue effectively. Companies with less knowledge and expertise took longer to react, chose a new structure that didn’t satisfy players, or worse still, didn’t recognise that changes needed to be made.
There is a tendency for poker businesses to undervalue poker experts. It’s easy to see why, as many poker businesses were founded by a small group of enthusiasts who found themselves short on business knowledge as the company grew, and had to hire people with that knowledge in order to keep themselves afloat. However, good businesspeople are much easier to find than poker experts.
A good businessperson can come from any other company. If you’re looking to hire a new head of accounting for example, you simply advertise the position, knowing that the person you recruit doesn’t have to have worked in the poker industry in order to do a good job. You might actively choose somebody who had worked at one of the big accounting firms over somebody who had worked for a poker company. There are lots of people out there that have years of experience in business in general and can do a very good job as long as their role is completely isolated from the poker side of the business.
Poker experts however come from a very small segment of the population. They are geographically disparate and difficult to recruit. A poker expert is like a diamond – rare and difficult to obtain, but extremely valuable. While many poker experts have little to no experience working in a formal corporate environment, they do have a big upside in that you can take a poker expert and teach them to become a businessperson. The typical poker expert is smart enough to learn the skills they need to succeed, either through formal education or on-the-job learning, and might really thrive with a little encouragement and support. It’s much more difficult to do things the other way around and turn a businessperson into a poker expert – you just can’t expect to be able to instil the kind of passion for poker that is needed to become an expert into somebody with no experience of the game.
As a poker business, you should recognise the poker experts within your company, value them as much as they deserve, and provide them with opportunities to develop their career and to grow as businesspeople. After all, it’s easy to turn a bracelet winner into an MBA graduate, but not so easy the other way round. If you don’t provide these opportunities, then you risk losing your expertise, which is the lifeblood of any poker business. A business without that lifeblood has no hope of survival in these times of tough competition. Undervalue your experts at your peril!
This article was published in InsidePokerBusiness, Jan-Feb 2011