6 Reasons Why the MIT Blackjack Team Became Entrepreneurs
Wow. Imagine being invited to moderate a free-form discussion with the people who lived out the book “Bringing Down the House” and the movie “21.” It doesn’t get any better than this.
At Xconomy’s XSITE conference last week, I had the honor of moderating a reunion panel of the MIT Blackjack Team with two of the original members (Bill Kaplan and Jon Hirschtick) and two (Neelan Choksi and Semyon Dukach) who reconstituted the team in 1992. The team is known for its sophisticated card-counting techniques that outsmarted many casinos during the 1980s and 1990s.
There were many great stories, but what stuck with me was that so many members of this famous team went on to found companies. Much like the propensity of lacrosse “bros” to end up on Wall Street and have successful careers, many blackjack team members found a common career in entrepreneurship. This surprised me because I thought a hedge fund manager (a path that some did choose) would be a better match for their skill set than the entrepreneurial option. But the panelists explained that there were six key reasons why many team members became entrepreneurs:
1. Team: It was the MIT Blackjack Team, not a collection of individuals. The whole was so much more than the sum of the parts. Creating a high-performance team that could accomplish seemingly impossible things gave them an adrenaline rush more than money did. Likewise, entrepreneurship is fundamentally a team sport, not an individual one, as MIT research has shown.
2. “De-Risking” Risk Taking and Making it Work for the Team: Every panelist said they would never play a game like roulette or the slot machines. They had no interest in random risk. Instead, they would play games where they could influence the outcome by exploiting a knowledge asymmetry. If they took a risk, it would be because the odds were in their favor due to their hard work. This is precisely the mentality that a successful entrepreneur needs.
3. Confidence in Long-Term Vision Despite Short-Term Data Points: While the other players at the tables might be irrationally affected by winning or losing an individual hand, allowing emotion to affect their play, the MIT Blackjack Team knew that if they stayed steadfast in their plans, their strategy would prevail in the long run. You also see this in the approach Jeff Bezos espoused in his famous video when Amazon acquired Zappos, when he said one of his fundamental tenets was to “think long term” (see 3:56 mark).
4. Enjoy the Challenge of Taking on the Big Guy and Bringing Down the House: The team members relished the MIT culture of creative irreverence and turning things upside down. You could practically see the endorphins being released in their bodies as they talked about how they hacked the system and outfoxed the old, stodgy status quo.
5. Making Their Own Rules: The group also carried over this pirate mentality to create new rules for their team. They understood the value of this, and they relished it and did not back away from the work involved. We frequently see this mentality with entrepreneurs, and they wear it with pride. It motivates them.
6. Discipline, Discipline, Discipline: Their task of “bringing down the house” and making their own rules makes them sound like pirates, but they simultaneously had the execution skills of a Navy SEAL Team 6. They were a highly focused, self-disciplined group of individuals and well-coordinated when it came to achieving their goal. (As I note in my new book Disciplined Entrepreneurship: 24 Steps to a Successful Startup, people often overlook the importance of discipline in successful entrepreneurs.)
What I found especially interesting was that the panelists (pictured above) were more excited about the above attributes of their team than they were about the money they won. In fact, money seemed to be a side benefit, and what was important to them was the confidence and skills they gained from their adventure. Yes, the money was good, but as the team members spoke about it, you could see from all their non-verbals that they were not as excited about it as one would think.
One of the panelists, Semyon Dukach, even said if he had a do-over, he wouldn’t play blackjack at all, but rather would spend his time on other things (maybe like taking my entrepreneurship class?).
So the next time (which will be today, most likely) you use an innovative product efficiently made with the low-cost CAD software package SolidWorks, thank the MIT Blackjack Team for training the entrepreneur (Jon Hirschtick) who founded that company, which overthrew the CAD/CAM software power structure. But there are many more examples of bringing down the house in business. In the end, understanding the lessons that the MIT Blackjack Team have taught us about how to be great entrepreneurs can be their most enduring gift of all.