Information is Money: Lessons from Poker 1
I’ve been unknowingly following good advice for keeping my brain fresh into middle age: studying topics that challenge my thinking. Podcasts during chores are a great time to study. The difficult concepts I listen to shake me up and keep my brain moving.
My latest obsession (my son’s word) is poker. I started playing with friends a couple of years ago, but I recently began actually studying. I’m still a beginner but I’ve noticed that my business thinking is changing based on what I’ve learned. I’ll try to relate the changes as I experience them.
Here’s the first. I was talking with a new client about how we could get started with our relationship. We were looking for something small to do first and we settled on having me present a webinar on Responsive Design. He asked how much it would cost for a one-hour presentation with followup email for questions. I quoted him a price. His response, “Oh, that’s cheap!”
Here’s where poker thinking helped. Before studying poker I would have started kicking myself–why oh why didn’t I ask for more? Simply put, I didn’t know what the market was for webinars. I couldn’t have known to ask for more, but that wouldn’t have stopped me from self-recrimination.
Rather than be frustrated, though, with my poker hat on, I was satisfied with the transaction. No need to kick myself. I had made a bet by offering my time. In return I got clear information–I could charge much more. The information I received was worth far more than the money I “lost” by not asking for more. I was out two hours (at a “reduced” rate), but I was up the future increase in earnings.
Studying poker has helped me establish the monetary value of information much more clearly than I ever have before. In poker, it’s common to trade money for information. By getting used to such exchanges, I am more relaxed in business.
Oh, and if you’d like a webinar, I’m available. My bid will be more than it would have been a month ago, but we can talk.
Hi Kent, there is a actual economic subject related with your talk, call “Information economics”.
Below is the description from Wikipedia:
Information economics is a branch of microeconomic theory that studies how information affects an economy and economic decisions. Information has special characteristics.
Poker players have been studying Information Economics for a hundred years (at least the good ones have
. It would be nice to be able to quantify the value of information, though.
Kent-
Could you share with us some of the podcast you listen to on a regular basis? I am looking to expand my listening.
Thanks and Go Ducks.
Poker podcasts I listen to regularly are:
* The Bear Blog
* Cash Plays
* Deuce Plays
I’d be interested if there are others that I’m missing.
I haven’t listened to those, but my favorite poker podcast is the Two Plus Two PokerCast. Some good strategy, but mostly just very entertaining.
It’s a little goofy at times, but I’ve listened to this poker cast for a very long time. Nice quality:
http://www.anteupmagazine.com/
Didn’t Bill Gates once say people going into business should play poker and chess? Poker because it teaches you how to deceive others, and chess because it teaches you to think many moves ahead of your competition.
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I’m reminded of the saying “time heals all wounds.” I remember the first job I got after graduating. The interviewer asked me salary expectations. I thought I was being smart by asking for $10,000 more than any job I had ever known before. He looked at me, he looked at my resume and said, “You have a college degree, right?” I was crushed. I got the job and for exactly the amount I asked for.
First thing I did was research on what a college graduate should be starting at. I should have asked for $10,000 more, at least. Before my one month salary review I made it apparent I knew what I was really worth and expected a big raise. I got the big raise.
Until now I had remembered this for the fact that I was an idiot for not asking for enough money. I know realize, if he hadn’t have let me know I asked for too little, I would never had prepared for the big raise.
Thanks for helping me to look at this differently.