ANNAPOLIS, Md. -- One member of the card-counting MIT blackjack team that inspired the film “21,” Jack Ma, shared anecdotes and business lessons from his life and work at the 2017 Conexxus Annual Conference.
Ma, the conference’s keynote speaker on April 24 in Annapolis, Md., has founded multiple business ventures and, most recently, tenXer, an analytics tool designed to optimize employee performance, progress and productivity, which was acquired by Twitter.
He shared his stories about everything from meeting celebrities to being banned from casinos between highlights from his business book, “The House Advantage: Playing the Odds to Win Big in Business,” which connect his own experiences at the blackjack table to business analytics and the power of data.
Click through for three lessons from Ma’s presentation at Conexxus …
1. Don’t trust your gut
“Everything we do at the blackjack table is 100% objective,” he said, noting that his MIT team was essentially collecting “big data” before it was coined as such. And as a card counter, gut feelings and hunches are removed from the equation. “It’s all about math and data.”
The tables also taught him many lessons that are directly applicable to businesses and industries and learning how to make better decisions through data and analytics. The first lesson, Ma explained, is basic strategy. “For every hand there is a right answer,” he said, noting that millions of simulations done on hands prove this; however, strategy often starts to falter when the fear of losing kicks in.
This fear, Ma explained, is what’s called the “mistake of omission bias,” where inactivity is favored over action. "In the sports world, omission bias kicks in when the stakes are high, the game is on the line and the clock is ticking. Understanding this can help you make challenging decisions,” Ma said.
He also shared the fallacy of the “gut” feeling. “You have to use data to make a decision.”
2. Never split 10s
Another lesson Ma shared was understanding the right decision vs. the right outcome—the concept of trusting the process. The process is actually more important than the outcome, Ma said, because data and analytics are applied to every step. “The idea that results drive narratives is incorrect. You have to focus on the process and not the short-term results.”
Ma shared an example from the tables on making better decisions, especially when the data is present. “You should never split 10s unless you’re counting cards,” he said, and the rest of the table, including the dealer, won’t want you to split your 10s. Splitting 10s refers to seperating one hand into two seperate hands when a player receives two cards of the same value. As a card counter, Ma had the data to support his decision but most players would choose otherwise to avoid conflict. Ma called this behavior groupthink.
“Get out of the idea of doing things because this is how it’s always been done,” he said.
And by not splitting the 10s, Ma said he’d be falling for what’s called loss aversion. “I’m more afraid of losing than wanting to win; it’s when we don’t want to give something up when we think we’ve already won.”
3. Don't let fear call the shots
Having the data is just one step of the process, said Ma. There are three pieces to the analytics component. Data, is of course, at the core. Second is collecting and investing the data. “You may know right away what to do with that data, but you have to build the data house,” Ma said. Third is privacy and doing right by your customers.
“Make sure the data you have is being used to benefit the customer experience,” he said.
Ma encouraged attendees to “believe in the numbers,” to favor action over inaction, get over the fear of losing and focus on the process over results. And above all, stick with it—even when things are tough.
To put Ma’s lessons in perspective, when he split his 10s the first time, he lost $50,000. Then, he did it again and lost another $50,000. Now $100,000 in the hole, Ma stuck with it. He ended that weekend up $70,000.
Conexxus is a nonprofit, member-driven technology organization dedicated to the development and implementation of standards, technologies innovation and advocacy for the convenience-store and petroleum market. Members collaborates on key industry challenges and innovations. Its efforts seek to improve profitability by reducing the cost of IT ownership and improving the competitiveness of its members.