Luck is for Losers

Risks in Kaplan's other ventures are less clear-cut. "It's not like blackjack, where you can program the whole game into a computer," he says. Still, in real estate he reserves his big bets for sealed-bid auctions and sales of bank-owned properties, where information is limited and so his research and deep knowledge of the local market give him an edge. At FreshAddress, he is scrupulous about financial exposure -- never assuming debt, reducing costs by licensing data as needed, and using resellers who receive a percentage rather than salaries. Kaplan expects FreshAddress, like blackjack, will pay off handsomely if he is prepared to wait.

Train. Test. Test. Test.

"Every few rounds, we'd ask them, 'What's the count?' If they were off more than once, they failed."

What do blackjack players and air traffic controllers have in common? They can't afford to make mistakes.

Perfection, of course, is a lot to ask. But Kaplan demanded it from his players, because the difference between making money and losing it was paper-thin. So he devised a series of staged tests, or "checkouts," everyone had to pass. Newcomers -- usually referred by a team member or intrigued by a blackjack class held on campus during winter break -- would show up at the MIT classroom that served as a practice space. First, they would learn basic strategy. Then, the checkout: two straight hours of play without a single mistake. Pass, and the aspiring player would learn to count cards, followed by a second two-hour checkout. "Every few rounds, we'd ask them, 'What's the count?'" says Kaplan. "If they were off more than once, or by more than one, they failed. They also had to make the right bets. The pressure would mount. Everyone would crowd around. They'd yell, 'He's never going to make it!' People are calling out numbers. They're doing everything they can to throw him off."

The final checkout -- three two-hour sessions -- took place at a casino. Again: no mistakes allowed. Blow it, and the player would have to practice more and try again. Pass it, and he could gamble with the team's money.

Sort of. Because just because someone could play perfectly didn't mean she always did play perfectly. Skills dulled over the week as people turned their attention to jobs and homework. So on Thursdays, the day before teams dispersed for a weekend of gambling, members would gather in the classroom for yet another checkout -- this one lasting 45 minutes. "Occasionally, people who failed Thursday night would say they'd practice on the plane," says Kaplan. "Fine. But if you fly all the way to Las Vegas, and the trip manager checks you out and you still fail, you are not going to play."

Similarly, at FreshAddress, employees receive thorough training in the company's industry, competitors, services, and internal processes, and then undergo oral and written examinations before they can start work. In addition, the company conducts weekly sessions to refresh salespeople's knowledge of subjects such as countering customer objections and legislation regarding electronic messaging. At staff Jeopardy! games, employees respond to questions about FreshAddress trivia. (Who coded the company's first website? What does "CPM" mean?) Kaplan has also retained the audience-participation aspect of training. New employees practice leaving voice-mail messages with prospective clients, and their colleagues critique them. "Everyone sits around and says, 'Honestly, I would never return that message. It was way too gruff or way too long. You didn't mention I visited your booth at a trade show; you made it sound like a cold call,'" Kaplan explains. "Like in blackjack, we not only grade what they know but also how they perform."

Require the contribution of skin

"All eyes were on the same goal. Each player was as concerned about his teammates' performance as his own."

Perfect play was necessary to join one of Kaplan's blackjack teams, but it was not sufficient. Players also had to invest their own money. Even students squeezing by on a loan and a job swabbing dining-hall tables kicked in at least $1,000. They were paid using a complicated formula based on hours of play plus a share of profits. (Big winners often received bonuses, but no players were docked for losing.) Those who brought in fresh blood trained the recruits themselves and earned proceeds from their first 12 hours at the tables. Having skin in the game kept everyone motivated and honest, essential in an operation that trusted players to walk around with thousands of dollars in their pockets. "All eyes were on the same goal," says Kaplan. "Each player was as concerned about his teammates' performance as his own."

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