I can’t help but think that “Jeopardy!” phenom James Holzhauer has a few things to teach entrepreneurs about hitting the peaks of success.
For those who haven’t followed this new sensation, Holzhauer is a professional sports gambler in Las Vegas who, since early April, has dominated the game show “Jeopardy!” like no one in the show’s more than 30 years on the air.
In just a little more than three weeks, Holzhauer has racked up more than $1 million in total winnings, setting several daily records along the way. And while he’s still a long way from all-time repeat champion Ken Jennings’s mark of 74 consecutive wins, Holzhauer’s daily take is so large that he would pass Jennings’ total haul of $2.5 million in half the time as long as he keeps on winning at his current pace.
So what does all this have to do with entrepreneurs? Everything. Holzhauer has done exactly what entrepreneurs are supposed to do — he’s disrupted an existing market through deep analysis, making strategic bets at the right time and mastering the technology he needs to win.
Here’s how Holzhauer combines these three elements to win big:
1. Sees things in a new way
First, he searches strategically for the “Daily Doubles” on the game board that allow a contestant to make big money bets. But he does this only after first winning some money on other squares.
This is so different from the way most contestants played in the past. Many past contestants would begin choosing the easiest (but less lucrative) questions to get a feel for the game. But Holzhauer starts with the hardest (and most valuable) questions to build up a cash kitty before hunting for the “Daily Doubles” so he’ll have more money to wager.
And in searching for the “Daily Doubles,” Holzhauer benefits from data records of past “Jeopardy!” shows. As the fivethirtyeight.com website reports, that data mining reveals that the greatest number of “Daily Doubles” since 2001 have appeared on the board’s fourth row and left-most column. Holzhauer searches for those most important squares once he’s got some cash to play with.
The lesson for entrepreneurs: Don’t accept that the way things have always been done is the best or only way to do them.
2. Bets big
Second, having found the “Daily Doubles,” Holzhauer bets big. His average “Daily Double” wagers have exceeded the average of past contestants’ wagers by a lot. His outsize betting allows him to build a commanding lead.
The lesson for entrepreneurs: Maximize bets. Go big or go home.
3. Knows the buzzer
And, third, Holzhauer understands the technology in a way other contestants don’t. Put simply, it’s all about the buzzer.
During the game, contestants signal their desire to solve a clue by pressing a handheld device. When host Alex Trebek finishes presenting the clue, an off-stage staffer hits a switch that frees contestants to press his or her buzzer. Holzhauer has mastered the technique of being the first to buzz, even if the margin over other players is a mere few thousandths of a second.
To do that, he built his own practice buzzer at home, fashioning it out of masking tape and a mechanical pencil, then tested it relentlessly to shave off microseconds. He also queried show staffers in depth on exactly how the buzzer technology works.
The lesson for entrepreneurs: Understand technology better than your competitors.
So those three factors — innovative tactics, maximizing bets, and understanding the technology — explain Holzhauer’s success.
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Smarts aren’t enough
Holzhauer is, of course, also very smart, coming up with the right responses across categories ranging from poetry to geography to math to history. But, then, all the contestants are smart or they wouldn’t have made it through the rigorous recruitment rounds to get on the show. It’s not what Holzhauer knows but how he deploys that knowledge that counts.
In the same way, entrepreneurs have to strategically understand a “game” or a market to see what others haven’t seen before. They need to dive deep into data to mine the best intelligence. They go “all in” when it’s time to commit. And the successful ones understand the technology as well or better than anyone else.
All those lessons apply to building a startup business.
More to come?
So why did it take more than 30 years since “Jeopardy!” first aired for somebody like Holzhauer to unlock the secrets of the board? Good question, but other fields show it’s not so unusual.
Why did it take major league baseball roughly a hundred years to develop the concept of the relief pitcher or, even later, of the closer? And why did it take somebody like Billy Beane, the general manager of the Oakland Athletics and the hero of the book and movie “Moneyball,” to see that obscure metrics could unearth the promise in marginal players? Once he did, everyone was trying to do the same.
Other “Jeopardy!” contestants in the past have played for the “Daily Doubles,” too. But it took decades of the show and thousands of episodes to teach a guy like Holzhauer how to break the bank.
What will it take to beat him? Either Holzhauer will have a really bad day or somebody just like him, somebody who has mastered the buzzer and the data and the strategy, will outplay him at his own game.
Or perhaps somebody may unlock yet another secret of the board that even a guy like Holzhauer hasn’t yet exploited. Stranger things have happened, after all.
Contact John Gallagher: 313-222-5173 or firstname.lastname@example.org. Follow him on Twitter @jgallagherfreep.