Phil Galfond - Running The Streets

Phil Galfond - Running The Streets

Saturday, 1 March 2014

From Nosebleed Pro to CEO

Two years ago, Phil Galfond’s career earnings surpassed $10 million. But crushing the nosebleeds simply wasn’t enough to satisfy him. Eighteen months ago, he set himself a mammoth new challenge: running a successful business. We talk to him about the highs and lows of being in charge of training site Run It Once, what needs to change in poker, and that legendary slide.

Hey Phil, thanks for chatting to us. How’s it going?
Pretty awesome actually.

Let’s talk about Run It Once. Did you always want to start a poker business?

I’ve always enjoyed poker training, and when I left BlueFire I still wanted to get back into teaching in one way or another. I was speaking to a very good friend of mine [Dan Quinn], and we both realised that there was something missing and people weren’t really doing it the way we thought they should. Honestly, RIO was more about teaching than starting a business. Since starting it, I’ve become more interested in business in general. Starting a poker business is much, much easier for me. I know people, I have a reputation, I don’t need to market, and I get to use my poker expertise. I’ve jotted down ideas for businesses outside of poker, and it’s probably something I’ll attempt one day. For now though, I just don’t have the time. RIO takes up a lot of my time, and playing poker is my true passion.

Those two things, and other interests, keep my plate very full. Overflowing, actually. There are so many things I want to do. I’ve started writing a poker book and a non-poker book. I don’t think either will ever get finished. I probably need to work on not spreading myself too thin.

When Run It Once came out, people complained that the market was getting too oversaturated with training websites. Did you worry about that?

Information is out there, and in every field where there’s a skill involved, there’ll be people that will start training schools. I did enter the market after it had already existed for a long time, and I don’t think that there’s anything wrong with teaching. Maybe it’s a simplistic way to put it, but I feel that poker is a fun game, and if you feel that the existence of training websites is hurting your win-rate, that means it’s helping someone else’s win-rate. We’re helping the guys that are willing to put in work, and love the game enough to want to improve. I think those people are deserving of the help and advantage they get.

Compared to 5 years ago, the general standard of play has increased massively. Do you think the same sharp increase will have happened again by 2019, or has it plateaued out?

I think skill level is going to continue to increase, although there’s only so far we can go. I think more mixed games are going to need to be spread, and perhaps deeper stack games, and perhaps new variations, because people are getting closer and closer to “solving games”. At the moment this is still fairly far away, but I could still see in our not so distant future people getting close enough to solving e.g. 100BB heads-up NLHE, that it doesn’t become very profitable to have that as a profession. Overall I think skill will increase, but the games will change to adapt to it.

What was your thinking with the two different price plans in Run It Once, and how did you work out what you thought would be fair margins?

Good question. On other sites there are a lot of high stakes videos and low stakes videos, and as a high stakes player myself, I’d just sift past the low stakes stuff. I’d think, why am I paying for this stuff I don’t need? On the other side of it, I felt like there are a ton of low stakes guys, who even at $30 a month, that’s still a stretch, that’s a big investment. They don’t need to learn from, let’s say, Ben Sulsky. They need to learn from people who are doing very well at their games, or a bit higher, and who can explain concepts very well. I thought there needed to be some kind of entry level membership – so that’s as far as the $10 membership. I think that’s underpriced and I did that intentionally, because I wanted as many people in the door and on the floor learning together as possible. The $100 membership – if I was going to do another training site, I wanted it to be the best, and in order to do that we had to everything we could to get these top tier pros on our site. That has been expensive, and is proving to continue to be expensive. I think actually that $100 a month is very cheap for what we offer. Had the market not been established, we probably could have charged a lot more – but we’d be laughed at if we came in at $400 a month when other sites charge $30!

How do you go about choosing the lower stakes players?

A lot of it is done via recommendation by low stakes guys that we know, or coaches that we already have on board. We really just scour the internet for any kind of hype around any player. We then look at their results and ask them to send a sample video. It is tough at the lower stakes to find that diamond in the rough. There are a lot of people who win at those stakes, but they’re not always able to teach well, or fully understand the kind of logic that I’m looking for. It’s really just a numbers game. We go through as many as we can, and we’re really lucky with our Essential Team.

Do you ever worry that the value of the knowledge you’re sharing is greater than the return you’re getting for it?

The one thing I say to a lot of my pros that are considering joining up is that if you’re looking at making these videos just to make money, then it might not work out. I think the majority of our pros are making videos in a large part because they enjoy teaching and they enjoy the positives of making videos. When I first started making videos I was worried about the cost/benefit analysis. I was aware that people were going to learn a lot about my game and be able to play a lot better against me. I think because I personally pay a lot of attention to balance and I’m able to adjust and counter-adjust, and all of my plays are kind of logic-, psychology-, and maths-based, rather than what I like to call ‘trick-based’ plays. The guys I hire tend to be that way too. I really don’t think I lost much as far as making videos and showing glaring potential leaks for people to exploit.

I’ve had a few people that have made several videos, and they’re pretty big winners at high stakes, but they just weren’t right for the site. I’d watch the video and email them back saying ‘I don’t think you should do this. A lot of your edge is coming from exploiting other players in a way that leaves you very vulnerable.’ If I felt they played in a ‘trick-based’ way, then if they made videos it’d hurt their win-rate quite a bit. So I was honest with them. Not only do I feel that I have a responsibility to be honest, overall it’s not good for them and it’s not good for the site if our guys stop winning. So it is a possibility that there’s a certain player type that would be hurt quite a bit by making certain videos, and I try not to hire those types.

How do you recommend people physically watch your videos – should you be making notes, or can you just sit and watch them?
I always say that not just with learning, but really a lot of different elements in poker, you need to know what works best for you. I know a lot of players who take extensive notes in videos, who pause it before I say what I’m about to do so they can think about it for themselves first, and see if their reasoning matches with mine. There’s also loads of people that just straight up watch them. Personally, even not including demos I’ve probably watched around 1,500 videos, and it’s just because I like to watch a video before bed – it helps me wind down and go to sleep, and I still learn quite a bit from doing that. You just have to try out a lot of different methods and see what works for you.

Galfond 2

What’s it like being the boss – is it a lot of pressure being responsible for employees now?

It’s a weird feeling. There are eight guys full time working for RIO, not including myself… another 2-3 part time. Currently, we have three independent programming/design companies working on things for us, and that’s on top of the four guys we have on staff who do that. Obviously, we then have all of our pros, but I view that as different because we aren’t their primary source of income.

It all makes me feel… I dunno… grown up. One thing that I’ve learned is that finding guys who you can completely trust with something is priceless, and it’s a very rare quality to find in people. Especially since I spend so much time playing poker, I can’t be there for every little decision. But honestly, I could walk away for a year and just leave Dan to make all the decisions, and I know the company would thrive.

We started with Dan and I just telling the team what to do, more or less. But now that we know the team better and have confidence in them, the decisions are made as a group. It’s more like, “I have this idea, what does everyone think?” Most importantly, everyone is cool. It makes business so much more fun when you genuinely love the group of guys you are working with.

Could you tell me a bit more about the lounge last summer?

Sure. We’ll be doing it again this summer. There’s a lounge at the Rio near the Penn and Teller theatre, and we had a really nice space to just chill out. We had a few TVs where we could play demo videos. Inside the lounge was access for Run It Once Elites only. We just had snacks and drinks in there, sometimes some events where we had an open bar. We also had TVs with people hanging out.

Are you expecting to get a lot more sign-ups from guys hoping to get an iPad handed to them at their main event table?
We’ll see. Yeah, we gave out a lot of iPads last year. We haven’t planned giveaways yet for next summer, but if people want to sign up and take the chance then they should go ahead! [chuckles]

Yeah, it is very expensive in the answer, and Taylor Caby was the original pioneer for both online training sites and also branching out into further business. Have you taken any advice from him?

I don’t recall if I’ve taken any direct advice from him. Taylor is someone I have tremendous respect for. Great poker player, great guy, great businessman. I actually remember speaking to another friend, Jay Rosenkrantz (of DeucesCracked) before Run It Once was even a thing. He said (I’m paraphrasing… it’s been a while) that their philosophy has always been to make decisions for the customer, with the customer in mind. Do what you would want the company to do if you were a member of the site, rather than focusing on return and profit and success. The success will come later.

There was no clear direct benefit to having the lounge. Call it marketing or customer appreciation. The fact of the matter is, we spent six figures on it and I highly doubt we saw a profitable return on that investment. We just wanted to do it, for the members. The costs piled up quickly. If we’re going having a lounge, we’re obviously going to make it nice in there. So we spent extra on that.

We had a bunch of T-shirts printed up. We weren’t going to use cheap material. We were going to pick the best shirts we could, regardless of cost. And we weren’t going to try and profit off of them. We just gave them away to any member who wanted one.

Now, that’s something we might reconsider, because, for example… We made hoodies for all of our pros that ran us somewhere between $40-$80 each, depending on the type. A lot of members wanted some, and we only printed a few for the pros because we realized that spending $80k+ on free hoodies on top of everything else crossed the line into spewing money. So maybe we’ll make them and sell them this year. I don’t love the idea of selling them, but I like it better than not having them at all for the people who want them. I’m learning as we go.

Look, to be entirely honest, the response to RIO has been great. We’re doing really, really well, from a response and a revenue standpoint. But, I’m still in the red. I’ve spent all of it and more because I just want to keep improving our product and building our community. When people wonder why we are higher priced than our competitors… it’s because that’s what it takes to deliver the product I want to deliver.

Galfond 3

Let’s talk more about you. You were the first pro to move out of the country after Black Friday – was that a big leap for you?

No, not really. After Black Friday, I went into Vegas with no specific plans – I knew I was going to go somewhere – and just ended up with a couple of friends of mine in Vancouver, and after Vegas we headed there. I never really thought twice about it. Obviously it was a big move to go from the East Coast of the US to the West Coast of Canada, but it was just another option. I was never going to stop playing online poker, it was just a case of where.

Last time you talked to Bluff Europe, you explained G-bucks to us. It’s been a good few years, but do you ever get people coming up and asking you about them?

Yep. It’s rare but it does happen occasionally that people will ask about it or tell me how much they enjoyed the article. It’s funny now looking back on it, because at the time it was a big deal, but now range analysis is something that even low stakes players are already doing. It’s become dated a little bit. I don’t think I would necessarily make corrections to it, I could probably expand upon it... but no, I think back then, it wasn’t necessarily a concept I invented, but it was one that people weren’t talking about yet. And now they are (laughs).

You used to have a really popular blog. Are you ever going to start writing that again?

The main reason that I haven’t is that I’ve been too busy. It takes me a really long time to write anything up, and for some reason I’m incapable of writing anything short! I actually have something written up right now that I’m going to put somewhere... I think we’re going to open a blog section on RunItOnce. So if and when I do blog, which probably will be quite frequently, I’ll do it there.

Your blog ‘Let’s Make Some Changes’ was posted a little over two years ago now, where you addressed things like bum-hunting, online button-stealing and results tracking databases. Do you think any of the changes you called for have been made?

Not as many as I’d like. PokerStars went to Zoom only at high stakes recently, which is maybe not the best solution, but still a fairly good one I think. They needed to do something to help the game, and I do think that was a step in the right direction. Having said that, there’s still a lot of problems. It’s difficult because whatever kind of rules you make, there’s usually going to be some kind of loophole that opportunistic players will find a way to exploit. The one thing that I really dislike that Zoom will hopefully take care of is when a weak player sits out everyone else sits out immediately, and the person who doesn’t sit out is punished by posting the big blind. I really don’t like that, and I think that needs to be done away with, because as long as that’s an option people are going to sit out as fast as possible. It’s not good for the game, and it’s humiliating for the weak player who sits out first.

There are certain restrictions that could be put in place that might help, but then you risk making playing more complicated. This might make it harder for recreational players to sit, and nobody wants that to happen. Solutions like being forced to post a big blind before you leave if you’ve only sat down for a short time have potential, but it has the downside of meaning that people are forced to play a certain number of hands. Also, if it’s someone who usually plays live and is trying out online play, things like that might confuse and frustrate them. I don’t know if there’s a perfect solution yet, but I’m glad that people are continuing to talk about it, so that something is on the way to being done hopefully.

Galfond 4

You recently had quite a big prop bet riding on the outcome of The Voice. Did you win that?

Yeah, I crushed! It was actually against Hac [Dang] and another friend of mine. We did $10k each, and it was basically a fantasy draft – when there were 48 people left, we drafted teams and I ended up with all 3 of the final 3. It was a lot of fun.

The custom-built slide connecting the floors in your old apartment has become stuff of legend. Would you ever get another one for your new house?
Maybe something like that... I think so. Probably not exactly the same thing. An idea will have to hit me. I haven’t outgrown that kind of thing, if that’s what you’re asking!

For potential property investors – is adding a slide to add value plus EV?

You know, it wasn’t that expensive relative to the home, and even if a lot of people who came in to look at the house didn’t want the slide in it, it was simple enough to remove. I think it helped me!

I’m sure we’ll see that on Location, Location, Location soon. Do you have any particular goals for the future at the moment?

No. I remember back when it was my second or third year playing poker. I was still at school at the time. I figured out what I thought my win-rate was, and I sat down with pen and paper and made all these plans about how much I wanted to play every week, how much I’d be making, when I’d move up stakes and what I’d spend my money on. I quickly learned that it’s so difficult to plan, because you have so little control of your results. So no, I don’t have any short term or long term goals. I’m really enjoying working on Run It Once, and playing. I’ve been starting to dabble with some new games, and I’m trying to get back into high stakes NL, which has been fun. I’m just going to continue to play and work on the site as long as I enjoy it, and it still makes me happy.

Phil Galfond on the Run It Once Pros

Ben ‘Sauce123’ Sulsky

When we were looking for people to make videos, Ben was at the absolute top of my list. He is obviously undoubtedly one of the best in the game, and his approach to poker is very different to mine, which makes things a lot more interesting to watch. It’s hard to narrow it down to one, but he’s maybe the toughest opponent I’ve ever played. He’s one of the few guys who I play against and I’m not really sure if I’m beating him or not. Ben approaches the game from a much more theoretical sense. He figures out what kind of hands he wants to be playing in certain situations, and he doesn’t deviate much from that.

Galfond Sulsky

Di ‘Urindanger’ Dang

Di is someone who changes his game all the time. He’s someone who loves to consume knowledge. I’d describe his brain as like a computer, because he likes to build his game from other information. He reads, he watches videos, he talks to people, and anything you tell him he’ll file away. I remember he played a hand, and afterwards I asked him why he played it the way he did. He replied by reminding me of something I’d said to him once – 4 years ago! The way he thinks about hands is so, so fascinating to me. He picks information from the table and puts it into his computer-head, and then finds the best solution.

Galfond Dang

Brian ‘tsarrast’ Rast

Brian’s a guy I met a long time ago, while we were both playing in the big $200/$400 PLO games. He was one of the best regs at the time, but since has become more of a live guy, spending a lot of time in Macau etc. He’s had tremendous success. I was really excited to get him on the team because he was like a triple threat – he plays everything! He’s one of the only people who’s made some live videos,which were amazing. He’s always been super intelligent and a really critical thinker, which always makes for a strong video-maker. Before he joined up he was posting in the forums a bit, and we had legions of people saying “sign Brian Rast!” We responded like yeah, gladly!

Galfond Rast

Jason‘NovaSky’ Koon

Jason’s awesome. He’s a really great guy to have around, because in addition to just being a lot of fun he’s an absolute fitness freak – he’s the best motivator I’ve ever met, and he keeps me healthy. He’s just an impossible guy not to like. In terms of his MTT videos, he may have been the person I was most impressed with of all the guys that we hired. He is the top requested MTT pro, and everyone’s really excited when he comes out with a new video. He’s got such a strong work ethic, which is a big part of why he’s had so much success, and he has the biggest heart of anybody I’ve met. There’s definitely a lot of parallels between being an athlete and being successful at poker. I think it’s essential to be competitive, so you see a lot of guys like Jason who are really into sports do well at poker.

Galfond Koon

Sam ‘SamSquid’ Grafton

Sam has some of my favourite videos. I really liked his videos that he did with Craig McCorkell. On top of being a really good player and explaining his thoughts well, he’s extremely entertaining. It’s important to bring that energy to a video to keep people engaged. People sign up to training sites because they want to learn and improve their game, but people end up watching videos half the time to be entertained over anything else. This summer was the first time I had met Sam in person in the lounge, and anyone who has met him – or even just sat in a room with him, where he’s at a table three tables away [laughs] – you can hear how fun of a guy he is.

Galfond Grafton

Tags: Phil Galfond, Ben Sulsky, Brian Rast, Sam Grafton, Jason Koon, Di Dang, Ben 'Sauce123' Sulsky