You're Playing Too Tight

I paid a lot of my expenses in college playing poker. This was 2004, 2005... the height of the poker boom.

ESPN was showing the World Series of Poker every night, and suddenly every dorm room had a game going.

I learned two things fast: First, always play with trust fund guys because they're terrible at cards (game selection).

Second, pot odds and bet sizing matter more than the cards you're holding.

That second lesson changed how I think about small business growth.

In poker, you're not trying to win every hand. You're trying to make +EV (positive expected value) bets—bets where the expected value, over time, works in your favor.

If there's $100 in the pot and it costs you $10 to call, you're getting 10-to-1. You don't need to be certain you'll win. You just need to win often enough that the math works.

I see business owners who never learned this. They clawed their way to stability and then locked themselves into the exact same cautious, survival-mode thinking that got them there.

They won't spend $5,000 on anything unless they can guarantee it works. They need certainty. They need proof. They need someone else to go first.

Here's what you should be asking instead: What's the “pot size” (meaning how big of a deal is this if it works), and what does it cost to see the cards (what do i need to bet to figure that out)?

Isaac Zimmerman runs J Blanton Plumbing.

After buying it, he grew it from $5 million to $25 million in a few years (we discuss that on the pod here).

One reason: he hires global talent recruiters constantly (Huge EV+).

Each one costs a few thousand dollars a month. Most months, they won't find anyone. But if one of them lands a single skilled plumber who wouldn't have joined otherwise... that plumber could add $1 million in revenue per year.

Do the math. A $3,000/month recruiter costs $36,000 annually. Potential return: $1 million. Isaac doesn't need a sure thing. He needs ONE hit out of ten tries. Now if you want to be clever, you could reduce his COGS from this, but I don’t know his margins and you get the idea.

Most plumbing company owners would never make that bet.

"What if the recruiter doesn't find anyone? That's $3,000 down the drain."

They want proof first.

Meanwhile, they're still stuck at $5 million (or whatever, you know what I mean here).

At Sagan, we spent the last year taking shots at new distribution channels.

Each one cost about $10,000 to test properly.

The first one didn't work. Neither did the second, third, fourth, fifth, sixth, seventh, eighth, or ninth.

Then the tenth one hit big. It unlocked what looks like millions of dollars in value.

Lucky?

Maybe.

But we were right to take the bet.

Every single fucking time. Each $10,000 gave us exposure to a potential outcome that could transform the business.

The “pot” wasn't $15,000 or $20,000. It was seven figures. When the upside is that large, you can afford to be wrong nine times (or 90 times!) and still come out way ahead… as long as the math works.

Most business owners never do this math. They look at the $10,000 and ask, "What if it doesn't work?" They're still thinking like someone playing with a short stack... where every dollar has to count, where one bad bet means lights out.

But you're not playing with a short stack anymore.

You have room now.

When you have room, the question changes. Not "Will this definitely work?" but "If this works, does it change everything? And can I afford to find out?"

The answer is almost always yes, if you're honest about what "afford" means.

Ruinous risk is real. Can't make payroll? You're done. Out of the game. But ruinous risk and spending money on something uncertain are two different things. If you've got six months of runway and consistent revenue, a $10,000 bet won't kill you.

What WILL kill you: playing so tight that you never find the next big move.

You'll plateau. You'll optimize. You'll get really good at doing exactly what you're doing now. Five years from now, you'll still be doing it, wondering why everyone else is growing faster.

The real enemy is the story you tell yourself about risk. You think losing a hand means you played it wrong.

Sometimes you make the right bet and lose anyway. Variance happens. You can't control outcomes. You can only control whether the pot odds favor you.

Once you're out of survival mode, stop thinking like a survivor. Think like someone with chips to play. You earned them. Use them. Not recklessly (you still can't go broke!) but understand that being too conservative usually costs more than a losing bet.

Take the shot. Run the test. Spend the money. If it doesn't work, you'll learn something and move on. If it does... it might change your whole business.

You survived the hard part. Now go win.

P.S. - If a smart Harvard Business School dude thinks it’s a good idea to broker global talent (and make 50% or more on all hiring fees)… maybe you should take a look? 

PPS - Sagan now has a big team dedicated to just our candidate packages (which we are improving and adding to every week). Check out an interactive one here, or the screenshot below.