Second Best: First Broke

After arriving in Las Vegas from New York, Jack Singer, played by Nicholas Cage in the movie Honeymoon in Vegas, decides to kill a few hours before his wedding to play in a friendly poker game to welcome new guests. When he's complimented on his astute play, Singer boasts, "I play in a regular game in the city."

Don't all the tourists?

After he makes a jack-high straight flush, he's really ready to show that he belongs. When Tommy Korman, played by James Caan, shows him a queen-high straight flush, he's suddenly $65,000 in the hole. But Korman has a solution – lend Singer's fiancée Betsy, Sarah Jessica Parker, to him for the weekend and he'll call it even.

When Singer informs Betsy of this, she is incredulous and starts to lay into him.

A distraught Singer screams, "I had a straight flush! Do you know what a straight flush is? It's like, unbeatable!"

"Like unbeatable is not unbeatable," Betsy responds, which leads Singer to scream the unforgettable line: "I know that now!"

The next thing you know, she's on a plane to Kauai with a gazillionaire while he's agonizing over his bad beat.

Your worst nights at the poker table probably weren't when you were dealt rags or couldn't hit a flop. The hands that end up costing you money are the ones in which you make a good hand but your opponent makes an even better hand – as Jack Singer learned the hard way. Sometimes you can't avoid it – for example, when you raise with big slick and it comes A-K-4, there's no way to avoid putting in a bunch of bets against a set of fours.

There are ways, however, to avoid situations in which second best becomes expensive. In hold'em, folding hands like A-Q, K-Q, and A-J against an early-position raiser will prevent you from flopping top pair, only to get outkicked. In Omaha (straight high or high-low), drawing to a flush that isn't the nuts puts you in a position of making your hand, only to come in second.

As is the case in poker, competing in business means maximizing wins and minimizing losses. Paying attention to the latter saves your resources for the next opportunity.

Suppose you're given the opportunity to bid on a multimillion-dollar project for a new client. In the RFP (request for proposal), the prospect has stated that you need to fill out a 150-page questionnaire and must bring 12 company representatives to Anchorage, Alaska, to present your findings. You then learn that 15 other companies were given RFPs, including four that have done work with the client in the past. You also find out that the chief decision-maker's sister is the CEO of one of those firms. Do you still go after this business?

Even if you do go after it and somehow manage to get the deal, you may find that the cost of acquiring this customer, coupled with the cost of maintaining this customer, is too expensive to make a profit. There's an old axiom that the happiest customers are the ones who pay full price. The ones who beat you down on price often continue to ask for more concessions after they have become a customer. Doing business with these people would be like trying to rob the house of a family with a couple of Rottweilers, a security system, and an armed guard. It's more cost-efficient to look for an easier mark.

When evaluating opportunities in poker and business, not only should you be thinking about the potential income – you also must be thinking about the potential to make second best. Even if you have created a formula for a great new cola beverage to compete against Coke and Pepsi, there just might be too great a chance that you could spend millions of dollars on product testing, marketing, and promotion and still end up not penetrating the market. It's the businessperson's equivalent of drawing dead.

In poker and business, sometimes the best investments are the ones you don't make.

Greg Dinkin is the author of The Poker Principle: Winning in Business No Matter What Cards You're Dealt, which will be published by Crown in April 2002. He is also the co-founder of Venture Literary (www.ventureliterary.com), where he works with writers to find publishers for their books and producers for their screenplays.