VARBusiness 500 Keynote: How Running A Business Is Like A Game of Blackjack

In a keynote address at the VARBusiness 500 conference in New York on Monday, Ma shared a few lessons for business executives that he learned in his years as part of the MIT Blackjack team, a group of MIT students who employed a sophisticated card-counting technique to beat the odds at Las Vegas' blackjack tables.

The team based its approach on the premise that a higher percentage of lower cards dealt tends to favor the dealer, while a greater percentage of higher cards favor the player. By tracking the low and high cards dealt, the MIT group could gauge how much to bet -- an approach that required a sophisticated signaling system between a team of four or five players dispersed throughout the casino floor.

"It was all very James Bond cloak-and-dagger," said Ma, laughing.

But the group's success was no joke; in fact, after years of winnings Ma and his team were eventually banned from playing blackjack in the Las Vegas casinos.

However, the basic elements that made the group so successful can also be applied to the business world, Ma said. That starts with having trust in each other and in the process, he said.

"We learn that from the most basic elemental way possible: We give someone $100,000 in cash to take to Vegas and say, 'Make me some money.' There's no auditor following them from table to table. There's nothing to stop them from pocketing it," Ma said. "You have to trust people, and you have to trust the information you're getting from people. If I have any doubts about it, I can't do my job."

A defining moment for Ma was when he found himself down $100,000 after two successive bad hands in blackjack.

"It was a ... real gut check, where I thought maybe what we're doing is not the right thing and I began to question our methods," Ma said.

But Ma conquered his doubts and returned to the table -- and ended up with a net profit of $70,000 by the end of the weekend. Goal-setting and organization were the other two key criteria that made the group successful, he said. This is a lesson key for VARs; while most solution providers agree that setting and managing goals is the best way to ensure growth and success, more than half of them operate without a formal annual business-planning process, according to the 2007 VARBusiness State of the Market survey.