What Poker Taught Me

In 2004 I had my first job as a software developer. I worked on an online poker game, and since I didn’t know anything about poker, I learned about the game as much as possible. I read books about it, and I played Texas Hold’em online for a few hours each week. I kept playing for a few months after I left the company.

I was a mediocre player at best, but I managed to slowly earn a bit of money; I won around $200 playing micro stakes for a couple of years. When I started I played loose, my profit and loss was going up and down. It would be positive for a few weeks, and in a single evening I would lose all my earnings. I got increasingly conservative, and my game improved. I looked at a lot of hands and only played the strong ones. What poker taught me is that over time you win by not losing. Don’t lose your money playing bad hands hoping for a lucky break.

I went to the casino a couple of times, and the most vivid thing I remember is a stranger losing $500 at my table in less than an hour. He had decent hands, but the flop wasn’t a good match for his game. He should have folded after the flop, but because he bet aggressively early, he couldn’t let it go and he lost even more money by staying in hopeless rounds until the showdown. He played it off as bad luck, but he wasn’t fooling anyone. Everybody at the table knew he was a sucker, I felt sorry for him. This made me realize how destructive gambling addiction can be.

This is the sunk cost fallacy: People can’t let go of something because they have invested a lot into it. They feel they have to keep going to justify their past behavior. Throughout my life, I have witnessed this over and over.

It’s the employee who stays at a dead-end job because of the promotion he didn’t get for the past few years. He thinks surely next year he’s going to get it. Five years later he’s still doing the same thing, he hasn’t improved, but he still hopes while everybody is getting ahead.

It’s the manager who keeps on putting more resources into a hopeless project because admitting failure would ruin her reputation in the short term. The worse the situation gets the more desperate she is to save the project.

It’s the company that keeps on developing and trying to sell a product nobody wants because it’s the only asset it has. Shutting down the failing product and trying to pivot is unthinkable.

It’s the friend who stays in a failing relationship because it’s been too long, because they’ve tried so hard to make it work. Restarting with somebody else isn’t an option because they are getting old.

Learning to let go is essential, especially when we are young. Failure is normal, success is often the exception. Failure can help us grow, but only if we move on. I fell for the sunk cost fallacy, I stayed with the wrong job, lover, project or friend for too long, eventually I moved on. The pain turned into joy once I realized I set myself up for something better.

I learned this by letting go of many bets at the poker table. Once the money is in the pot, it’s no longer mine. It’s the same in life: let things go; focus on the future instead of trying to justify or save the past.