

Play poker with investors, not roulette - katm
http://www.aaronkharris.com/poker-and-roulette

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earbitscom
x-post from comments:

There is an analogy here but it's not that you're playing poker against
investors. As a startup founder, you are the house. You are trying to attract
players who will place a bet. If your startup is a good bet you want to
attract poker players who will play against each other and bet big based on
the odds. If your startup is a bad bet, you want to attract roulette players
who will play against the odds and bet against you.

Good poker players play based on statistics and pot odds. They want to bet the
same way they would if they had all of the information in front of them and
could calculate that the exact odds are in their favor. If you have a great
startup, a.k.a. a favorable hand/game for making an educated bet, you want to
show as much information as possible and attract poker players. It's okay to
let dummies play, too, as long as they're not reckless drunks, and you have
nothing to lose in showing them all of the available information, too. And the
winning outcome is when your poker playing investors win their hand, and tip
you big as the dealer.

If the odds are stacked against your company, you need to deceive players into
thinking you're a good bet or attract players who don't know any better. That
requires either hiding information or, worse, bluffing. Roulette players have
the odds stacked against them and are just gambling, either because they
believe in getting lucky or lack the ability to play a game of skill. So, if
you have a bad startup, you're trying to attract gamblers and give them less
information so that they think they have a chance of winning even though it's
a long shot.

Basically, you're not playing poker against the investors. You're just trying
to attract players. The kind of players you want depends on the game you're
offering. If your game is a good one that educated players can make money at,
give them all of the information. If your game is stacked against the players,
attract drunkards and don't tell them how bad their odds are.

~~~
akharris
Hey joey -

Overall that's the point I'm making. What I'd say, though, is that trying to
deceive players is a bad strategy over the long run despite what might seem
like short term benefit.

~~~
earbitscom
Yeah, I don't condone it. I was just saying that if there were any reason to
share less information it's when you're not a good bet.

