The Mental Game of Entrepreneurship

Applying psychological lessons on controlling our emotions from poker and golf to running a business

According to most databases of online poker players, about 80% lose money, 15% break even, and 5% of players win money. What I lack evidence of - but strongly believe - is that a considerable percentage of those losing players are good at poker, the card game. They lose money because they're bad at poker, the mental game. 

This is why the best book to improve at poker was written by someone who never played poker. It's titled The Mental Game of Poker by Jared Tendler. 

Jared Tendler was never a poker player. He was an elite college golfer who failed to make it to the professional level of the sport despite possessing professional-level skills because he repeatedly choked in big moments in tournaments. He lets the pressure of the moment, the swirling emotions of anxiety and fear, affect his decision-making and his ability to get “in the zone.”

Poker players have a word for letting emotion impact your ability to make the most rational decision that moves you towards your goal - tilt. 

While Jared Tendler could never revive his golf career, he pivoted his career to psychology. He tried to understand the root causes that led to him being unable to handle his emotions when he most wanted and needed to. During this journey, he discovered that poker, much like golf, was an endeavor where, at the elite level, emotional control was as important, if not more important, than a strong technical ability of the underlying game. He became a coach for professional poker players and turned many of his lessons into a book and a sequel.

The Mental Game of Poker is one of my favorite books because so much of its advice about dealing with tilt and emotions applies to other aspects of our lives. Jared himself has applied it to other topics, such as day trading, but entrepreneurship is a field where it has even more applicability. 

Mental Game and Entrepreneurship

The relationship between "mental game" and entrepreneurship is rarely discussed, even though the connection seems obvious. For example, at the end of 2022, one of the top posts of Hacker News was titled "I am done. I give up.", in which an indie hacker laments their lack of progress on any of their efforts. This person complains about their products lacking any attention or followers. Ironically, this poster now had a platform on the top spot of one of the most popular websites in the world, and he didn't use this as a chance to gather any interest or feedback on what he worked on. This person ran out of motivation and let their emotions prevent them from making the best decisions to advance their goals. In other words, they tilted.

Roughly speaking, I’d break down two essential pillars of the entrepreneurship mental game - tilt and motivational runway.

Tilt

In poker, tilt is most commonly associated with anger and frustration - a player loses a big pot that they were a favorite to win, and they "blow up" and start playing very aggressively and poorly, perhaps hoping to recover their losses, or simply irrational rage. This was famously captured in a scene in the movie Molly's Game. 

Jared Tendler walks through several different forms of tilt that we might not commonly associate with poker, but that he found are more common in professional poker players. Many of these can be directly re-framed for entrepreneurs: These include:

• Hate-Losing Tilt - Poker players and entrepreneurs need to be prepared and accustomed for loss and failure, sometimes due to random chance. We all know that sometimes the difference between failure and success is being in the right place at the right time, and we have to accept that.

• Mistake Tilt - Sometimes we lose due to bad luck, but sometimes it's a result of our own mistakes. However, expecting perfection is irrational. As Tendler writes, Mistakes are essential to improving as a player; in essence, by hating mistakes, you hate improving. In both poker and entrepreneurship, it's far more critical that we experiment and learn from our mistakes than aim to avoid them entirely

• Entitlement Tilt - Entitlement tilt is the belief that you deserve to win for reasons such as working harder, being smarter, or having a longer career than others. Both poker and the entrepreneurial world are filled with young hotshots who can have meteoric trajectories that outshine many of us who have worked at it and "paid our dues" for longer. Being upset by this is irrational and pointless.

• Overconfidence Tilt / "Winner's Tilt" - While many non-poker players are familiar with "anger" tilt, few are familiar with "winner's tilt", though most poker players have experienced it. Winning can be just as disruptive to our emotions and thought process as losing can, and can easily lead to overconfidence and dangerous mistakes. 

The solution to all forms of tilt involves developing stable confidence which is neither underconfident and fearful, or overconfident and reckless . 

How do we develop stable confidence? That is a long, complex, and personalized journey, but if there's one summarized takeaway, it's treating mental game with as much importance as we treat the actual "game" we're playing, whether that's winning more money at a card game or trying to grow the revenue of an online business. The first step is simply being aware of the importance of mental game. We can diligently journal and track our mental game, and take notes about our forms of tilt, our causes of tilt, and learn more about methods to prevent tilt.

My Experience with Entrepreneurship Tilt

I’ve had my own experience with tilt and Hacker News. In December of 2022, I shared a blog post called “The Simplest App That Makes Money” that detailed a small experiment I made trying to write the simplest possible app I could monetize.

I had taken a few weeks to code a minimal Apple Watch app with preflop charts for poker tournaments. I shared the post on Hacker News and it ended up on the front page, and the comments were incredibly hostile and uncharitable. When I first read them, I was furious.

First, they accused me of creating an app for cheating. I felt very strongly that the app was not for cheating, since I had read the rules of the World Series of Poker and checking devices and charts between hands is explicitly allowed, which was the main intended use case of the app.

Next, they accused me of suggesting that someone should only make software in order to make money. I’ve made lots of apps and games “just for fun”, so this again offended me. Finally, some implied that I was suggesting that you should do anything in order to make money, which was again, an extreme distortion of my intended message.

I had one piece of very good luck. I didn’t see the comment section until about 10 hours after it had been on the front page. The post had originally been flagged, but the Hacker News moderators decided it didn’t deserve to be flagged so they “second-chanced” it, which happened while I was asleep and so I missed most of the conversation.

Given my emotional state, I would have been far too defensive and hostile to those comments. I wanted to tell all those rude commenters why they were wrong and hypocritical. This would have been pointless and counter-productive. Even if I disagreed with the perception of my blog post, there was a lot of value in understanding why the post was perceived that way even if I disagreed with that perception.

Truthfully, it probably didn’t matter whether or not my app was technically cheating if enough people perceived it that way. When I tried to pitch it to my target market - professional and semi-professional poker players - many of them didn’t think it was cheating but still didn’t like it because they were worried they’d be perceived as cheaters.

Based on that feedback, I abandoned the app, but tried to take the lessons that I was able to successfully monetize a poker app with a new app (www.livepokertheory.com) which tries to help people memorize poker ranges away from the table with spaced-repetition.

As far as the people who distorted my message on Hacker News, I’m far from the first person that’s happened to, and I won’t be the last either. Rude and hostile social media sections are an inevitable aspect of online entrepreneurship. While the highest form of tilt might be to get angry, totally ignoring those messages can also be a form of tilt if you miss out on valuable feedback. With stable confidence, we can parse out the useful feedback from uncalled-for rudeness and use it to improve our work.

Motivational Runway

There’s another key aspect of entrepreneurship mental game - motivational runway.

Motivational runway refers to how much time and energy an entrepreneur can sustain their motivation and drive for their project. It's essential to have a source of motivation to keep pushing through the inevitable challenges and setbacks of entrepreneurship. 

In startup circles, founders are well-versed with the concept of financial runway. This is the idea that when you run out of money, the game is over. Several related concepts have sprung up around the idea of financial runway, such as getting to ramen profitability or default alive.

Very little has been written about motivational runway, despite it arguably being more critical. One of my favorite talks is "Bootstrapping VEED.io from $0 to $5M ARR in 2 years," where the founders talked about how they ran out of money, not motivation. Rather than shutting down, one founder took on a contracting job and funded both of their food and housing while the other kept working on it full-time.

Veed.io survived and thrived despite burning all of its financial runway, because of an abundance of motivational runway. It turns out that motivated people can find money. On the contrary, money doesn't always create motivation. Plenty of startups shutdown and return money to investors because the founders no longer believe in them. And plenty of bootstrappers throw in the towel before they've truly personally exhausted their financial options to persevere.

Summary

In business, like in poker, no amount of skill can overcome letting emotions trigger terrible decisions that undo our progress. Maintaining our motivation, confidence, and emotional stability is just as important as being skillful at the direct business operations we're executing. There are many techniques and ideas on how to improve our mental game, but the first step is simply being aware of its existence and importance. 

Mental games and the relationship between mental health and entrepreneurship is a topic of huge interest to me, so I'd love to write more about this topic.

If you take away only three things from this post, remember these things:

1. Motivation is one of our most critical resources and should be carefully protected, sometimes even at the expense of our money, time, and assets, as motivation can help recover those things.

2. Mistakes are how we improve. If you hate making mistakes, you hate improving.

3. Mental game is a skill that can be improved with diligent introspection and awareness.

Thanks to Catia Prin, Bill Dotson, Louie Bacaj, and Chris Wong for reviewing this article, and to Louie Bacaj and Chris Wong for creating “The Newsletter Launchpad”, now part of “Small Bets”, which inspired me to start this Substack.