Luck is for Losers

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Always keep the count

"The count is everything. If you lose the count, you have to get up from the table and walk away."

Kaplan is still squash-team trim and tall enough to need extra legroom in airplanes. He looks like the athlete he is, and he maintains the athlete's obsession with focus. Blackjack, after all, is a game, as is business. Take your eyes off the goal, and you stumble.

At a blackjack table, there is one goal -- keeping track of the cards -- and many, many distractions. Kaplan encouraged rowdy audiences at checkouts, because he knew what players could expect in the casinos: waiters offering drinks (which players were not permitted to accept), other players chatting, pit bosses hovering, big wins, big losses. Players had to respond as casually as possible to all those stimuli while never, ever, losing the count. "The count is everything," says Kaplan. "If you lose the count, you have to get up from the table and walk away."

For his part, Kaplan was focused on meeting projected returns. But distractions were frequent and occasionally overwhelming. As more teams embarked on weekends, Kaplan spent more time during the week working with lawyers to retrieve the confiscated money, chips, and possessions of players who had been caught counting. Sometimes plane tickets were part of the casino's haul, forcing him to scramble to arrange players' transportation home.

One event in particular rattled Kaplan for months. In 1993, a player accidentally left a paper bag stuffed with $125,000 in cash in an MIT classroom overnight. By the time the building opened, the bag had disappeared. The university ultimately located it (a janitor had stored it in his locker for safekeeping). Still, the FBI, the IRS, and the DEA were called to investigate, and it took Kaplan and his partners three harrowing months to retrieve the money. Maintaining his focus on operations through that ordeal required a monumental act of will.

Now at the helm of a traditional company, Kaplan and his partners keep the count with big-picture meetings once a week, at which they limit discussion to FreshAddress's three or four major goals. Says Kaplan: "We have to keep asking, Where are we now? Where are we headed?"

Seize the moment

"When you've got the advantage, get out the money."

Winning at blackjack requires patience. Players would bide their time until the count turned favorable, at which point they would raise their bets or signal a big player to join the game. But sometimes, just when a deck started to smoke, a pit boss would look over their shoulders, and "they'd lose their nerve," says Kaplan. "They'd think, If he sees me make a big bet, he'll kick me out. I'll wait until he walks away." That's a losing strategy, says Kaplan, because players make all their money in those next few rounds. Hence the teams' mantra: "When you've got the advantage, get out the money."

Kaplan concedes that his own nerve failed him when he shunned publicity after Bringing Down the House hit it big. For years, he had kept mum about the team and its strategies for fear of exposing active members. Even when the book bared all secrets and former players scurried from the shadows to share Jeff Ma's limelight, Kaplan worried that people might find his past unsavory. It wouldn't have been the first time.

In 1977, Kaplan took the biggest risk of his life: postponing admission to Harvard Business School for a year in order to play blackjack in Las Vegas. When HBS found out, it revoked his acceptance. Beyond panic, Kaplan composed a lengthy, handwritten explanation of how he was applying his math, statistical, and computer science background to a real-world problem and pointed out that running the team was excellent experience for his stated intention of becoming an entrepreneur. "Five weeks later, I got a call from the dean of admissions," says Kaplan. "He said, 'You can now tell people you are the only person ever to be admitted to HBS twice in one year."

Thirty years have passed, and attitudes toward gambling have changed. "Poker is big, and there's no longer this negative connotation," says Kaplan. "The public sees the MIT experience as a story about brilliant people beating the game." That's why, with his blackjack teams in the public eye, Kaplan is finally telling his story. Shortly before the movie premiered, he hired his first publicist. He has since been interviewed on Bloomberg Radio and other news outlets. And he's working on a proposal for his own book.

"I've got the advantage," says Kaplan. "It's time for me to get out the money."

Leigh Buchanan is an Inc. editor-at-large.

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Leigh Buchanan

Leigh Buchanan is an editor at large for Inc. Magazine. A former editor at Harvard Business Review and founding editor of WebMaster magazine, she writes regular columns on leadership and workplace culture, and she contributes Inc.'s capsule book reviews, "A Skimmer's Guide to the Latest Business Books."

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