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Damien Steel: Poker is Great 'Soft Skill' Tool for Start-Ups
38-year-old Damien Steel is a Managing Director at one of the larger venture capital funds in Canada, OMERS Ventures.
Responsible for leading investments in the Technology, Media and Telecommunications (TMT) sectors, Steel is an expert on investing in early stage technology start-ups.
He also happens to have a serious passion for poker that's been re-ignited lately thanks to a few wise words from his wife.
How and where do his two specialities overlap?
Steel recently wrote an article explaining why he thinks everyone who’s an entrepreneur (or wants to be) should play poker so we sat down with him at the PokerStars Championship Bahamas Main Event to dig a little deeper.
(Ed. note: Steel made it deep into Day 4 of the Main Event and eventually finished in 21st place for $24,640.)
PokerListings: Please introduce us to your work.
Damien Steel: A big part of my job is to find good companies and entrepreneurs and backing them with capital, but also sitting on their board and helping them to grow that business and ultimately sell it.
PL: Do you suggest to your employees that they play poker?
DS: Not necessarily to employees, but I mentor a lot of entrepreneurs and these are people who are hungry for information and they’re all working to start up businesses.
One of the things I found out over the last 20 years is that there are these amazing similarities between poker and what you run into when you start a business.
Poker is all about making the right decisions with very limited information. That’s no different from starting a business.
You’re venturing into something new that’s extremely risky and you make decisions on the fly with less than perfect information, all the time.
Poker is a nice and a fun way to hone the soft skills that you need to use every day when you’re starting a business.
PL: How long have you been playing yourself?
DS: I started playing over 15 years ago before the Moneymaker boom and then got into it even more online after the boom started.
When I got married five years ago I stopped playing to take care of other things. Last year, there have been a couple of unfortunate things surrounding me which made me reflect on life.
So, one day my wife said to me, ‘you should really play more poker if you love it that much.'
PL: Your wife said that? That doesn’t happen very often in the poker industry.
DS: I know, I’m probably the luckiest guy in the world. So, I’m back in poker. Whenever I find a tournament somewhere nice that I can play, I jump at the opportunity.
For me there’s nothing better than sitting at the table with a bunch of guys from everywhere in the world and from all walks of life and playing the game I love.
PL: You seem to get involved in a lot of hands.
DS: A typical characteristic of young entrepreneurs, and I probably share that, is impatience, if you can stereotype it. But also, during the first 90 minutes of playing at a table, I try to gather as much information as possible about my opponents.
I might not be technically the best player in the world, and I’m sure the math kids out there would say that a lot of things I do are mathematically incorrect, but I like to try and talk to people and find out what they do to figure out what kind of person I’m dealing with.
In my job today I have very little time to do due diligence on the individual. I need to figure out within a month whether or not that person has what it takes to be a successful entrepreneur before I invest my money.
That’s no different at the poker table. You have to figure out who’s good and who has certain tendencies and within a very short time.
One of my biggest criticisms of the game today is that it has become much less social. I was lucky to sit at a table yesterday where nobody was listening to music.
There were a couple of pros at the table, like Ryan Riess, who is probably one of the nicest pros I’ve played with in a long time. He has really embraced that ambassador role and tries to make poker fun again.
I told him that I don’t get it; if I were a pro player who does this every day for a living, I would try to make guys like me have a good time. Otherwise all they’re doing is passing their money around and nobody wins.
I know you have to make a living, but try to make it fun.
PL: Do you recognize poker skills in others at the business table?
DS: Again, it’s about the soft skills. Not being afraid to take risks but taking calculated risks is important. It’s one thing to just blindly take risks or to gather information and take calculated risks.
PL: Is this like the difference between a well-thought-out bluff and just betting?
DS: Absolutely, and it’s also having a plan in everything you do, calculating the possible outcomes and how you’re going to react to them.
One thing with entrepreneurs is, they can’t control a lot of the things that are happening around them, in their company, in their market, with their competition. All they can do is what they do and how they react to those external elements. That’s the same in poker.
Another big thing that we talk about to start-up entrepreneurs is that they need to have market-fit products before we spend a lot of money on a company. What we mean by that is, you could have the coolest technology in the world but if no one is willing to pay for it, then there’s no business.
What we tell the entrepreneurs then is they have to fake it. Fake the product until you’re sure someone is willing to pay for it. Bluff! You have to bluff to the market.
Say that you’ve created a specific piece of software that will find customers for you automatically, even if that software hasn’t been built yet.
You pay a bunch of kids to scour the internet for companies who would be willing to pay for such a product while at the same time you build the product in the background.
This wouldn’t work long-term but in the short term you can fake it enough to get some customers and then invest the money to actually build it.
PL: Should poker be part of the training for young entrepreneurs?
DS: I’m not sure about that. These young entrepreneurs are put under enormous pressure. Any outlet that releases some of that pressure is good, especially if it hones some skills.
The interest in poker is amazingly high, though. We ran two charity events in Toronto last year, and they were limited to 100 seats, but we could have easily sold 300. That’s how popular the game has gotten in the entrepreneurs community.