A CNET News article from last week, High-stakes start-ups, paints an unusual picture of one of my favorite software companies:
Sitting at his desk in a small, stuffy office in a gritty corner of San Francisco’s South of Market district, [Brad] Meador is nonchalant about the win. It’s just another Wednesday morning at ClearContext, a software start-up that’s keeping the lights on and the servers running with the aid of its founders’ online poker winnings.
Meador, who is head of operations at ClearContext, and Deva Hazarika, the chief executive officer, have been playing poker in lieu of collecting paychecks for the past year while working to get their three-person company off the ground. After logging 50 or more hours a week at the office, each one spends another 10 to 15 hours, usually on weekends and evenings, at their favorite poker sites…
The point of the article, apparently, is that the go-go 1990’s are long gone, and startups have to be more frugal and creative. But I really wonder about the wisdom of allowing your company to be profiled this way. If ClearContext wants to make it to the next level, they’re going to need more capital at some point. Do you think any outside investor will give a seven-figure check to a group of people who choose to spend 15 hours a week playing poker online? Most VCs do background checks on their partners-to-be and will disqualify someone who appears to have a gambling habit, because they don’t want their partners dipping into the seed money when they hit a losing streak at the tables.
I’m not being a moralist or a fuddy-duddy. I used to play the horses. A lot. I was very good at it and could probably have supported a small start-up on my winnings. I still enjoy a day at the races, although I don’t get to go more than once or twice a year anymore. I also know a couple of professional poker players, the kind who were traveling the country playing in local tournaments long before the current poker obsession got started.
But let’s not kid ourselves. I went to the track because I liked to play the ponies, and I worked hard at being better than the competition. It took many hours of study and preparation to become an expert at that game, and I filled a lot of notebooks and databases with information, back in those pre-Internet days. My poker-playing buddies play because they enjoy the rush of winning, and they’ll be the first to tell you that consistently winning at poker is hard work. The guys at ClearContext are playing poker because they like the rush. If they’re routinely winning, it’s because they’re beating up on chumps and rubes, and they could be in for a rude shock if some real pros ever show up at their virtual table.
Ed Bott 
I agree with you – consistently winning at pker is hard work. I have played as a hobby for years and elevated it to supplement my livelihood when we decided to take a gamble on ClearContext. While many will argue whether pker is a game of chance or skill, when played in a near scientific manner, taking into account probability and the tendencies of opponents, this is a game where a level of skill allows an expert player to sustain a sizeable edge against the competition. That said, I do not enjoy the swings good p*ker play inevitably requires nor do I find it of interest enough to be a life-long pursuit. As soon as ClearContext can afford me a salary I will gladly move this game back into hobby status.
As for future business partners, let’s not kid ourselves about this – anybody who starts a company and anybody who puts money into a startup is a gambler. It remains to be seen whether the story will have an adverse impact on our ability to grow the company, but I suspect that the type of partners we are looking for are the type who will appreciate our “do whatever it takes” approach to gaining exposure for the company.
(Sorry for the * in p*ker – just trying to get around your comments filter…)
In my horse-racing days, I remember hearing over and over from people who tried to make the transition from successful amateur to pro. Several failed, often for psychological reasons. It’s one thing to make a bet for fun; it’s something else completely to bet when the mortgage or the rent is riding on your performance. Swings of fortune are a natural part of play. They’re annoying when you’re doing it for fun but crippling psychologically and financially when you can’t aford to lose.
Anyway, I think y’all will do just fine. I also agree with you that gamblers and VCs have a lot in common. How many Saturday night p*ker games are their on Sand Hill Road, do you think? 😉
(And yeah, aren’t content filters a PITA?)
Our country is built on enterprise and entrepreneurs taking risks.
Why do you hate America?