November 10, 2026

Business is like the game of Poker

Every poker room has one man who makes money on every hand without ever holding a card. He owns the room. While the players rise and fall on luck and nerve, he collects his share of every pot, calm as a banker, and goes home a winner on the nights when every single player lost. Business has the same figure, and he is easy to overlook because he never appears in the dramatic stories. He is the supplier — the man who sells the players what they need to play. In every boom this book describes, he was quietly there first, and he is usually there after the boom is gone.

The classic portrait comes from the California gold rush of 1849. Tens of thousands of men rushed west with a single plan: stake a claim, dig, and get rich. Most of them dug all summer and went home with nothing but the experience. But a few men in that same territory made fortunes that dwarfed the miners’ — and they made them without panning a single creek. Samuel Brannan, often called California’s first millionaire, got rich selling picks, shovels, and pans to the miners at prices the miners had no choice but to pay; he famously publicized the discovery — not from love of geology, but because every new believer was another customer. Levi Strauss sold the miners pants that would not tear. Wells Fargo sold them a safe place to keep the gold and a way to send it home. The miners took the risk. The shovel sellers took the certainty.

Notice what the supplier’s position actually is. He does not need to know which claim will pay, which miner is skilled, or whether gold is found at all. He wins on volume, not on outcomes. A thousand miners each needing tools is a better business than one miner who might strike it rich, because a thousand small certainties beat one large maybe. His profit does not depend on being right about the future. It depends only on other people believing in it — and there are always more believers than winners.

The pattern has never stopped repeating; only the shovels change. In the personal computer boom, the manufacturers fought each other to exhaustion while the maker of the operating system and the maker of the chips collected from nearly every machine sold. In the age of internet startups, young companies burned fortunes renting the servers and software their applications ran on — and the rent got paid whether the startup lived or died. Every gold rush in this book has its Levi Strauss. He is simply harder to write songs about.

I saw the same figure for years at the small scale of real estate development, and he taught me more than most developers did. When builders in a growing town are competing furiously — bidding land up, poaching each other’s crews, racing to finish first — ask who is certain to be paid. The lumber yard is paid on every house, whoever builds it. The title company is paid on every sale, whoever wins it. The surveyor, the concrete man, the fellow who rents the equipment: each of them collects in good markets and survives the bad ones better than the builders, because their income comes from the activity of the game rather than the outcome of any one hand. Some of the steadiest businessmen I ever knew never built a thing. They supplied the men who did.

None of this means supplying is easy, or that the supplier holds no risk. He can overstock before a bust and be left holding a warehouse of shovels nobody needs. His edge is narrower per sale than the winner’s jackpot. But his risk is of a different and kinder species: he is betting that the game will be played, not that a particular player will win it. In poker terms, he has traded the chance to win the tournament for a share of every pot — and over a long career, that trade is very often the richer one.

Here is the takeaway. The next time a boom arrives in your industry — and one always does — resist the instinct to ask only how you can play in it. Ask the second question, the supplier’s question: what will every player in this rush need to buy, repeatedly, whether they succeed or fail, and who is selling it to them? Then ask whether that seller could be you, or whether some part of what you already do could be sold to all the players instead of wagered against them. The miners are remembered. The shovel sellers got paid. At the Big Table, the surest seat is not always in the game. Sometimes it is the one supplying the game.

The lessons we can learn from the game of Poker

In a poker tournament, the blinds rise on a schedule. Every so often the dealer announces a new level, and the forced bets grow — not because anyone played badly, but because that is how the game is built. A stack that felt comfortable in the first hour is short by the third, even if its owner never lost a pot. Standing still is falling behind. When the price of playing keeps rising, your chips must grow just to hold their value. Retirement has a rising blind of its own. It is called inflation, and unlike a market crash, it never makes the news.

A crash is loud. It arrives with headlines, panic, and statements nobody wants to open. Inflation is silent. Prices creep — a little more for groceries, a little more for insurance premiums, a little more for property taxes, repairs, and help around the house. Each year’s increase is small enough to absorb without complaint, which is exactly what makes it dangerous. Compounded quietly over a long retirement, the creep becomes a flood. An income that never rises can lose something like half its buying power over twenty years. The check at eighty-five may be the same size as the check at sixty-five. What it buys is not.

Ask who stands most exposed to this leak and the answer surprises people, because it is not the gambler. It is the cautious. Anyone whose income is truly fixed lives in inflation’s path: the pension with no cost-of-living adjustment, the annuity that pays the same amount in year thirty as in year one, and above all the savings kept entirely in cash because cash feels safe. Cash has a seductive virtue — the number never goes down. But the number is not what you live on. What the number buys is what you live on, and a pile of cash standing still while prices rise is losing ground every single year, invisibly, without a single alarming statement to warn you. Safety that guarantees a slow loss is not safety. It is a leak with good manners.

Against this opponent, some of your chips are better built than others. Social Security, the foundation of most retirees’ guaranteed income, is adjusted for inflation — one more reason it is the most valuable stack in the late game, and one more reason the decision about when to claim it matters so much. Some pensions carry adjustments of their own. And then there are growth investments. Many retirees assume that prudence means leaving the market entirely at retirement, but a thirty-year retirement is a long game, and part of your stack has a job only growth can do: keeping pace with rising prices across decades. You do not hold growth investments in your seventies for excitement. You hold them because the far years of your plan need money that has grown, not money that has merely waited.

One corner of the budget deserves a special warning. Health care costs have tended to rise faster than prices in general, and health care is where late-life spending concentrates: premiums, the costs insurance does not cover, dental and hearing and vision care, and eventually help and care at home. That means the leak runs fastest at exactly the end of life where your spending is least flexible. A plan that assumes medical costs will behave like grocery costs is likely to be wrong in the expensive direction.

None of this is an argument for recklessness. The lesson of the rising blind is not to bet wildly; it is to refuse to stand still. The sensible response is a split stack: money for the next few years held steady and safe, where a market drop cannot hurt it, and money for the distant years kept growing, where inflation cannot quietly eat it. Near money protects you from the crash. Far money protects you from the leak. A retiree needs both protections, because he faces both opponents, and they do not take turns.

Here is the takeaway. This week, list your sources of income in two columns. In the first, write the ones that rise with inflation — Social Security, any pension with a cost-of-living adjustment. In the second, write the ones that are fixed forever, down to the savings sitting in cash. Then look at the balance between the columns and ask whether your stack, as it stands, grows at all. If nearly everything you own sits in the fixed column, you have found your leak, and it is worth a conversation with a qualified planner about how much of your money should stay invested for growth. The crash takes the careless in a season. The slow leak takes the merely cautious over a lifetime. Count it, and you can beat it.