ANNAPOLIS, Md. – Jeff Ma gained worldwide recognition as a member of the MIT blackjack team in the mid-1990s, which inspired the best-selling book, “Bringing Down the House” and the film, “21.” Since then, he’s founded multiple business ventures, and most recently, tenXer, an analytics tool designed to optimize employee performance, progress and productivity, which was acquired by Twitter.
As keynote of the 2017 Conexxus Annual Conference, taking place this week in Annapolis, Maryland, Ma shared his story with industry technology stakeholders—from celebrity encounters to being banned from casinos—and highlighted anecdotes from his best-selling 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.
“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 it 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.”
The fourth lesson is understanding the right decision versus the right outcome: the concept of trusting the process. The process is actually more important that the outcome, Ma explained, 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. First, he said, “You should never split 10s unless you’re counting cards,” and the rest of the table, including the dealer, won’t want you to split your 10s. As a card counter, Ma has the data to support his decision but most folks will choose otherwise to avoid conflict. This, he explained, is called 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.”
Having the data is just one step of the process, noted Ma, adding that 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.” 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.
In closing, 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.
Case in point: When Ma 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.
The 2017 Conexxus Annual Conference, April 23-27, is the only event that focuses on new technologies and technology standards to improve business processes, reduce costs and increase profitability in the convenience and fuel retailing industry. During this week’s event, business and technical Conexxus committees are meeting to discuss critical technology issues that are changing the way companies in the industry do business. From the latest on data security, to advances in payment technologies, attendees are taking part in the process that creates and sets technology standards.