The B in Business Stands for Bluff

How to explain poker's latter-day revival as America's most popular sport? An estimated 60 million to 80 million Americans play the card game, more than play baseball. Poker Web sites, where amateurs convene to play for real money in cyberspace, are among the most popular on the Internet. And Bravo network's Celebrity Poker Showdown has fashioned the game into a contemporary Hollywood Squares.

Perhaps the explanation is found in ESPN's coverage of Las Vegas' annual Binion's World Series of Poker, the most prestigious of all card tournaments. The broadcasts have elevated the game from a backroom pastime of cowboys, gamblers, and, more generally, middle-aged men, into a modern analogue for business acumen. By artfully televising match play from the perspectives of

individual players, ESPN has finally revealed poker for what it truly is: an intricate contest of strategy, cunning, and luck--and, says nine-time poker world champion Phil Hellmuth Jr., a high-stress laboratory for honing one's "social skills."

In other words, poker is the ultimate forum for liars. In what other sport, Hellmuth asks, can the player with the least amount of skill, resources, or experience come up a winner, merely on the strength of a bluff? None, except perhaps the sport of business.

"Poker is really about reading people," Hellmuth says. "What happens when you bluff? What does it look like when the other guy bluffs? Does he look right, does he look left? Under what circumstances does he fold or call? Poker is about understanding human behavior and managing emotions--yours and the other guy's. That's huge in poker, and it's huge in business."

Which helps explain why Hellmuth commands $10,000 fees for leading poker tutorials at corporate junkets. Here are his poker takeaways--good for card, kitchen, or boardroom tables.

1. Bluff when you can, not when you have to. Bluffing is a strategy, not a last resort. Think of Steve Case, who "bluffed" Time Warner's Gerald Levin into believing that 30 million dial-up subscribers were worth Time Warner's decades-old media empire--for a $99 billion pot.
2. Don't speak when you can nod. Don't move when you can be still. And when you are the player with the action, never, ever raise your gaze across the felt. PeopleSoft CEO Craig Conway wisely let the courts deal with Oracle's $7.3 billion hostile bid for his company, while stealthily--if not quietly--going about his own business.
3. Always be willing to fold a strong hand. In his pursuit of PeopleSoft, Oracle CEO Larry Ellison stubbornly stuck to his initial all-cash, $5.1 billion bid, even after it became clear that getting the deal done would cost almost 50% more than his bankers thought it was worth.
4. Always be willing to call with a weak hand. Hellmuth once called a $100,000 bet with nothing more than a "King high"--just as Amazon founder Jeff Bezos "called" Wall Street in 1999 for a $1.25 billion debt offering even as Amazon was bleeding tens of millions of dollars in cash. (The bankers folded, and Bezos got his deal.)
5. Patience is the highest virtue. Consider Dell, which has made a business--and good money, too--of letting other computer companies bring innovative technologies to market, then pouncing with its own lower-cost direct-sales model. Case in point: Dell's Digital Jukebox, a knockoff of Apple's iPod for 30% less.

Sidebar: Great Poker Primers

Poker how-to books are trading hands in Silicon Valley business circles as fast as Oprah's Book Club titles do at women's colleges. Phil Hellmuth Jr.'s own, Play Poker Like the Pros (Harper Resource, 2003), is a popular seller on Amazon and easy to digest. The Theory of Poker, by David Sklansky (Two Plus Two Publishing, 1999), is a cult classic, though it may be above the heads of novices. But if you're in the market for an avant-garde management crib sheet, we recommend James McManus's Positively Fifth Street: Murderers, Cheetahs, and Binion's World Series of Poker (Farrar Straus & Giroux, 2003).

Sent to cover Binion's for Harper's in 2000, McManus, a novelist and professor of literature by day and self-professed poker addict by night, decided the best way to chronicle the event was to gamble his $4,000 advance on an early, and cheap, "satellite" table (the method for rookies who can't afford the $10,000 entrance fee), with the hope of bankrolling himself into the "Big One." The results are impressive, with a dramatic twist that epitomizes the game. McManus's diary of his progression through the tournament is tedious at points, but it offers some of the best real-life explanations of poker in print. Readers also get a nice account of the game's roots. It's history, mystery, and how-to, all in one great tome.