Were you unable to attend Transform 2022? Check out all of the summit sessions in our on-demand library now! Watch here.
Poker is a game of variance and probability. You can be dealt the best cards and play every hand perfectly until the river, the final card dealt in a poker hand, is played and shifts the game completely to the opponent. Similarly, startups constantly manage and learn from unpredictable experiences. Scaling a startup requires quickly learning from the wins and losses, focusing on the long-term goals, and having a framework in place to help you make educated risks.
This episode of Greymatter isn’t your typical discussion around building enterprise startups. Greylock partner Jerry Chen and Blend CEO and cofounder Nima Ghamsari discuss the similarities between making educated risks in startups and playing poker. The two also share “the five whys,” a framework to learn from your mistakes and successes, and what it takes for your company to move fast.
Prior to Greylock, Jerry launched dozens of products as VP of cloud and application services at VMware, including several “1.0” releases. Nima has a deep background in scaling financial services platforms from having worked at Palantir Technologies, and now at Blend is bringing simplicity and transparency to consumer lending. In undergrad, Nima played semi-professional poker, and he applies the lessons he learned from his poker days, like risk-taking and how to plan for unpredictability, to his role as CEO and founder.
Below are a few key takeaways from the discussion, but there is much more to learn by listening to the full podcast.
Take educated risks
Every company wants to be data driven, but it’s important to understand that variants and probabilities happen in the real world. A process that might succeed most of the time can fail due to unforeseen variables (and vice versa). Being too result-oriented can cloud this understanding. Framing company measurement based on short-term results and not experimenting with new processes can lead to a company’s death in the long term. The early stages of a company are all about learning, so take educated risks and don’t be afraid to be wrong. If the risk does turn out badly, take time to learn why this happened to better prioritize responsibilities in the future, hire in areas where the company is weak, and ultimately avoid making the same mistakes again.
The five whys
As a startup, you must learn from the failures and the successes. The five whys framework can help get your team to the root cause of why something went wrong or right. Every other week or so, meet for 30 minutes and respond to every answer with a question starting with “why”: “Why did we lose a customer?” “Why was that thing important to our customer?” “Why was that thing not built into our product?” This framework will help you dig deeper and provide valuable insight into your company and/or product. No matter the outcome, implement the mindset that your company can always improve the status quo.
Divide and conquer
The earlier your company can divide responsibilities, the better. Autonomy and functional division of responsibilities allows your company to move fast. Hire a leadership team that you trust and that have a hands-on management approach, because autonomy over decisions is necessary to keep the entire company moving forward.
Elisa Schreiber is the marketing partner at Greylock Partners.
VentureBeat's mission is to be a digital town square for technical decision-makers to gain knowledge about transformative enterprise technology and transact. Learn more about membership.