Transcript

412:

Million Dollar Idea
Transcript

Originally aired 07.16.2010

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Full audio: http://tal.fm/412

Prologue.

Ira Glass

Hanco runs a shop that sells Vietnamese sandwiches and bubble tea on a corner in Brooklyn. It's a neighborhood favorite, lots of tables, and sunlight streaming in through big windows, crowded most of the day. Not long ago, a customer brought in a menu from a shop that opened up just four blocks away to show to Hanco.

Hanco

Yeah. When I saw this, I was really shocked.

Ira Glass

OK, so here's your menu. Just read the list of sandwiches from top to bottom.

Hanco

Classic, grilled pork, grilled chicken, sardine, shredded chicken, tofu.

Ira Glass

Now let's go to this other one and read.

Hanco

OK, classic, grilled pork, grilled chicken, shredded chicken, tofu.

Ira Glass

Or, go to the list of bubble teas. Here's Hanco's menu.

Hanco

Original bubble tea, almond, taro, honeydew coconut, coffee, thai tea.

Ira Glass

And the competitive, Henry's.

Hanco

Original bubble tea, almond, taro, honeydew coconut, coffee, thai.

Ira Glass

Of the 42 sandwiches, salads, appetizers and drinks on Hanco's menu, all 42 are on Henry's in the exact same order, laid out in the same places on the menu posted $0.25 to $0.50 cheaper. And when you hold the two menu side by side, it's the same font, same colors, maroon letters on white. Each one says in cursive, "free delivery on the upper right". The two menus look like copies except for the name on top.

Hanco

I guess they're being lazy. They don't want to be great creative. You're just like, "you know what, let's just copy and paste".

Ira Glass

The three people who owned this new place have all worked for Hanco at some point or another. There was Henry, there was Henry's mom, and there was Hui. Hanco says in retrospect, they were always asking, "how do you make this? What's the recipe for that?" And at the time he thought they were just trying to be helpful, until they opened up their own place and he put it all together.

For two nights after he saw the menu, Hanco couldn't sleep. He had trouble breathing. He wondered if he was having a heart attack. He was really upset.

Hanco

I understand like you want to start your own thing. But you don't have to be identical. Do something different. I mean, even though if you get my recipe, you stole my recipe. Or you didn't steal it. You just know it. I teach you. You know it. You work here for many years, you know the recipe. You start your own business. You open across the street, the next block. I mean, that's your choice. I can't do anything about that. You know, that's how it is. Why do you do identical? Why do you confuse customers? Because customers come to me, "is the the same as Hanco's".

Ira Glass

It has hurt Hanco's business. Sales are down 10% to 15% he said. Meanwhile up the street at Henry's, things are going so badly them Henry and his mom left after just a few months. Now Hui ran the place alone.

So I marched up the street to see what Hui had to say about all of this. Because Vietnamese sandwiches and bubble tea, they're an idea whose time has come, and not just in Brooklyn. They're popping up all over the country. You you buy Vietnamese banh mi sandwiches in Biloxi, Mississippi right now. And bubble tea, you can get it in Idaho. With all that potential and opportunity out there, all that money to be made, why did Hui and Henry imitate this one restaurant four blocks away so slavishly all the way down to the font on the menu? What were they thinking?

And when I got to Henry's to ask this-- it's this tiny little shop-- what happened next was very, very strange. There was a man and two women behind the counter. And they swore they had never heard of anyone, anyone, named Hui. "No, no," they said, "This place had a new owner, some guy in Queens name Joey".

Ira Glass

Does anyone work here who used to work at Hanco's? I brought a Cantonese translator with me because I've been told the Hui's English wasn't so great. Hui is Chinese, not Vietnamese.

Hue

I used to deliver food at Hanco's.

Ira Glass

And what's your name?

Ling

Me?

Ira Glass

The guy behind the counter got a funny look on his face.

Ling

Ling, I'm Ling. Ling, L-I-N-G, Ling.

Ira Glass

Yes, Ling told me he had worked at this place since the very beginning, seven months before. But no, he had no idea who this Hui was. He had never heard that name. When I asked him if they knew anything about how they came up with a menu, if they stole from Hanco's, Ling would say things that seemed to indicate that he had no problem copying the menu.

Ling

If you're like a kung fu student, if the master didn't teach you, how are you supposed to learn?

Ira Glass

And then in the very next, he would say.

Ling

But I won't copy them. We do their own thing. They do their own thing. There's a difference between the two restaurants and we just made a new menu. Take a look at it.

Ira Glass

And, in fact, the new menu was glossy, and multi-colored, and didn't look like Hanco's menu at all. Though, of course, it still contained most of the items from Hanco's menu. "Stop talking about the past," Ling kept saying. "We don't know about the old menu and how it was made, we only know about no."

Back out on the street, the translator, his name was Lee, and we couldn't figure out what just happened. Ling had told us that he thought it would be perfectly acceptable if they copied from Hanco. But then he also said that they didn't copy from Hanco. Also, somehow he had never heard of Hui . None of them had. Even though Ling had been at the restaurant since the day that Hui and Henry started it seven months before. None of it made any sense. And it was hard to let it go.

Lee

They don't know who Hui is apparently.

Ira Glass

But Ling worked here with Hui .

Lee

He didn't know the name Hui , but he knew the old owner, whoever the old owner was. But basically, I'm pretty sure he does know who Hui is by his body language. He wasn't answering. Other questions he was answering. He just with avoiding the question whenever I mention Hui .

Ira Glass

Do you think he's Hui?

Lee

I don't think so. But that would be funny if he was. He did take a while to answer his name his own name. So I don't know if that's really his name.

Ira Glass

Let's take his picture.

I pull out my digital camera, walk back into the restaurant, stand right in front of the counter facing Ling and the two other employees. I say nothing, point the camera. I shoot. I walk out.

Four minutes later I'm back down the street inside the place where I started, the first restaurant, Hanco's. I show Hanco the photo and ask if he recognizes anybody.

Hanco

That's Hui with the white hat. I've never seen this one. This is probably his wife.

Ira Glass

So we had back four blocks in the other direction to Henry's store. And without the tape recorder on, I explained to Ling that I know he's actually Hui . And I told him that I'm not trying to embarrass him. But please could he just explain to me why he and Henry decided to knock off Hanco's menu so thoroughly and completely. He tells me, basically, that it was Henry's idea. Henry, when I check with him, says that it was actually Hui's idea. But neither of them could actually understand what the big deal was with copying a menu.

"All restaurants take from each other", Hui told me. You'll have two Japanese restaurants across the street from each other. They'll both sell the same items. That's how it always goes." In fact, Hanco, the guy with the first shop in the neighborhood, Hanco will tell anybody's who is curios that he got the idea for his place by visiting another Vietnamese sandwich shop in New York, one called Nicky's.

Sandwiches and bubble tea are this unlikely million dollar idea. It's this unlikely idea, but it started at one job and it spread like a virus through Brooklyn, infecting one small, aspiring businessmen after another, leaving a trail of jealousies, and ambitions, and hurt feelings in its wake. None of these three guys are talking to each other anymore. Apparently a million dollar idea can do that, even if the idea does not make you $1 million.

Today on our radio show, we have stories of million dollar ideas, some of them with enough juice in them that they're actually worth actual millions, some of them only good enough to turn your life upside down and wreak havoc as you chase after them. At WBEZ Chicago, it's This American Life distributed by Public Radio International. I'm Ira Glass, our show in four acts today. Stay with us.

Act One. Going Up?

Ira Glass

Act One, Going Up? There's a whole world of engineers and investors who are actively trying to invent million dollar ideas. And in that world, there's something called an elevator pitch, which is pretty much exactly what you would guess it is. It's the pitch that you would make for your product, for your idea, if you bumped into a rich investor on an elevator. Figure you have 60 seconds, what's the vital stuff that will convince them. What are the details that you leave out?

This is such a specific skill, apparently. MIT actually has a contest for its students and faculty with thousands of dollars in prices for elevator pitches. There's a little video on YouTube encourage people to pitch in this contest.

[MUSIC - "SEXY PITCH" BY MIT $100K ENTREPRENEURSHIP COMPETITION]

Get it? Tim Rowe was a judge at this year's elevator pitch contest. He's an investor. And he runs what he describes as basically a big frat house, filled with start-up companies called the Cambridge Innovation Center. He told me, "Elevator pitches actually do happen in real life." He's even witnessed one in an elevator. But usually they go like.

Tim Rowe

You're walking through the halls at, say, MIT. And you see a professor there. And the professor is standing with a visitor. And the visitor turns out to be a famous venture capitalist. Right? And the professor turns to you and says oh, Joe, this is so and so. He's looking around for interesting things to invest in. And this is your moment, right?

Ira Glass

Wait, wait, wait, and you've actually seen this happen?

Tim Rowe

This happens literally every day in Cambridge, Massachusetts. There are probably 100 venture capitalist circling, looking for the next thing to invest in. And so it's these chance meetings, it happens regularly.

Ira Glass

The basics of a good elevator pitch, he says, are straightforward, talk in a way your grandparents could understand, don't expect the listener is an expert or knows scientific jargon. That's apparently a challenge for lots of engineers. You also have to explain how you and your team are qualified to actually accomplish the thing you're setting out to do. You have to prove you're an expert in field, if you've got Nobel Laureates working with you, it would be a good time to mention it. And finally, engage the listeners emotions. Grab them from the start.

At the MIT competition, there was a pitch for medical procedure that Tim says, "Did that really well with a very simple gimmick". Here is the pitch. There was a space theme to the competition. So you'll hear each pitch begins with a countdown.

Mit Competition Annoucer

Three, two, one.

Audience

Take off!

Mit Student 1

This year, Harrison Ford turned 67, putting him at a high risk for prostate cancer. If tomorrow he were to be sadly diagnosed with this disease, he would discover that he has two main treatment options, either undergo surgery to remove his prostate rendering him impotent, or do nothing but be comforted by having sex.

At Hydrangle Systems, we don't want the Indiana Joneses if the world to have to choose between life and sex. That is why our team of biomedical engineers at the Johns Hopkins University has designed and created the Apex. The Apex is a probe-like device that is used during minimally invasive freezing procedures to protect the sex nerves surrounding the prostate and maintain patient potency.

Ira Glass

Let me just pause this for a second. So I heard that, and I wondered how poor Harrison Ford get dragged into this pitch.

Tim Rowe

Yeah, exactly. But if you took Harrison Ford out of it, it would lack that moment that causes you to set up and listen. Now I don't know that Harrison Ford ever had this procedure. I think it really has nothing to do with him. But it was a wonderful device. And really probably everyone in the room remembers that pitch a year later.

Mit Student 1

The prostate cancer treatment market is worth $3.4 billion. The Apex will start generating revenue at the end of year two, and is so transformative that the acquisition of Hydrangle Systems at any stage will allow for a quick return on investment. So men and women, don't let prostate cancer be your temple of doom, invest in Hydrangle Systems. And we'll let you stay as active as Indiana Jones.

Tim Rowe

There's more one more element that I really think is important in a pitch, and made the difference between the pitch you just heard, and the one that won that competition. And that is that what you're doing has to matter.

Ira Glass

Matter, you mean, like there's a lot of customers out there?

Tim Rowe

Well, no. That's good. Big makes money. That's important. That's mattering in one way. But I think there's so much going on in the world today, there's so many choices we have about what to spend our time on, that we tend to put a little extra energy into the ones where we say, this is a problem that really needs attention. Right? So I worry about Harrison Ford's sex life somewhat. That matters I suppose. But they're probably problems out there that matter more.

Ira Glass

Really so you're almost saying that people who invest in stuff want to make the world a better place as part of their investing, and that you have to take that into account.

Tim Rowe

There are certainly investors who care only about the money. But I think that of the investors I know, they would prefer to have an investment which both makes money and does something exciting that makes the world a better place. That's probably why most of us who do investing got into that.

Ira Glass

Really? Didn't people get into investing to make money?

Tim Rowe

I'm talking about the investors who invest in new ideas, the crazy new ideas, if you will. I think if you were just purely interesting in making money, you would probably end up on Wall Street. And if you are hunting around the halls of MIT, meeting with the head of the chemistry department, that kind of person is a little bit of a quirkier person, and in my experience, is someone who is more about the outcomes and not solely about the economics.

Ira Glass

Well then let's play the winner. And let me ask you what is this person doing right. Let's hear the pitch

Mit Competition Annoucer

Three, two, one.

Audience

Take off!

Mit Student 2

The most widely used manufactured material on the planet is concrete. On average, each person uses more than three tons of concrete a year. Unfortunately concrete manufacturing process contributes to more than 10% of carbon dioxide emissions worldwide. However, they have been able to develop a concrete that not only cuts the carbon dioxide emissions by half, but also it is five times stronger than normal concrete.

Our design is unique because we have discovered how to change the very nanostructure of concrete. This approach is environmentally friendly, and at the same time, it reduces the costs of concrete manufacturing by 40%. Given that the US market for concrete is over $100 billion a year, this makes--

Ira Glass

Actually, let me stop so far. So what have you heard so far that's working?

Tim Rowe

OK, so it's just unbelievable. So first of all he's saying this is $100 billion market. So it's a lot of money. The greed gene, the greed glands are flowing here. Second of all, he's saying our product is cheaper than what's out there now. The single biggest motivator for a business, or anybody, to use a new product instead of the existing product, is because it's cheaper. So that's a quick way into the market. OK, so it's cheaper.

Second of all, if he said it's better but it's not cheaper, that's trickier, right? Well, do I need it better? So the first thing, it's cheaper. The second thing is it's also better. He said it's five times stronger than existing concrete. Wow. And then he gives you the it matters line. Right? He says that 10% of global production of carbon dioxide emissions is from concrete.

Ira Glass

And then here he gets to the point where he has the qualifications of the people that they're a team who can actually pull this off.

Mit Student 2

We have a team of five researches, including three superstar professors at MIT. I, myself, am a last year Ph.D. student working on innovative concrete. And we are looking for two more passionate people to complete our team for financial aspects.

[APPLAUSE]

Ira Glass

Now you hear a lot of pitches. What are some of the weirdest pitches you've ever heard?

Tim Rowe

Well, this is actually very recent, in the last few weeks. And so I hope someone listening to this program is enthralled with this idea, and somehow finds the entrepreneur and invests in them. We didn't. But this entrepreneur probably has a number of dogs and has a backyard. And the question is what to do with all the dog remainders left in the backyard.

And what they invented was a cup that you can put over the dog remainder. And it liquefies the poop so that it will flow into the ground, and I guess also fertilize the ground. And the way they describe doing it is that they have a series of high speed knives which move through the space underneath this cup, through the poop in every possible direction while-- I think, if I understood it correctly-- spraying the poop at high speed with water, something of the nature.

Ira Glass

Ew.

Tim Rowe

Well you say that, but if you have this problem, wouldn't you want to make the poop go away?

Ira Glass

I don't know. There's just something so disgusting about that, about this device. Then you have to like clean out the poo-encrusted device afterward.

Tim Rowe

Well, I think actually, the high speed water actually cleans it. So I think it cleans itself.

Ira Glass

Ah. So I don't know why, but it just seems really disgusting to me. Why didn't you invest in it?

Tim Rowe

I think maybe that's one of the things, that it didn't seem like something that we wanted to bank our futures on. We'd probably have to go to conferences and demonstrate this on a regular basis or something.

Ira, the inventiveness of people in this country is just completely remarkable. I've lived all over the world and--

Ira Glass

Wait, wait, I want to stay on the poo for a second. I feel like what you're saying is very uplifting. But I want to bring us back to poo. You know the problem with this, what you're saying, that's exactly the problem with this. If you got into business with these people, you'd be talking about poo all the time. Like your life would be filled with these poo discussions. And you'd be constantly having to evoke the image in your head of poo dissolving underneath this cup over and over. Like that image would be in your head like every day. You'd have to think about that. Like who wants to be in that business?

Tim Rowe

Well you know, people are in the septic tank emptying business. Right? I mean these are businesses. Somebody has to take care of them. Why not this one?

Ira Glass

Tim Rowe, venture capitalist at the Cambridge Innovation Center.

[MUSIC - "SEXY PITCH" BY MIT $100K ENTREPRENEURSHIP COMPETITION]

Act Two. The Invention of Cheese.

Kumail Nanjiani

Have you guys heard of this new drug called cheese, cheese? You've heard of it? No, OK. That's like the street name for it. It's like a new drug cocktail called cheese. And I read like four or five news reports on it that were like, "There's this new drug called cheese that's sweeping the nation. Kids in the Midwest are doing it. It's an epidemic. It's a new drug. It's an epidemic."

Then I looked up what cheese is, cheese is Tylenol PM and heroin. So really it's heroin. It's mostly heroin. Heroin's doing the heavy lifting in this drug cocktail. It's not a new drug. It's mostly heroin. I can't put heroin on pancakes and go, I have a new drug. I call it shake cakes. You eat them every day. If you stop, you'll get the shakes. Don't forget the special shake sauce, it's maple syrup and heroin. Pour that on there. It's not a new drug, is my point. It's mostly heroin.

I think the last new drug was crystal meth, which you had to make in your bathtub. And if you [BLEEP] up while you were making it, everything would explode and you would die. That's how dangerous that drug is. Just trying to make it can kill you. And you make it just from shit you get at the store. To make cheese, you still need heroin. Just do the heroin. You already have heroine. Just do the heroin. That my message to you guys tonight. Just do the heroin. That's my time, guys. Thank you.

[APPLAUSE]

OK, kids, say no to drugs. That's Kumail Nanjiani performing at Comix in New York. You can find his tour schedule on Twitter. He's headlining his first show at the Hollywood Improve August 17.

Coming up, smoke your way to financial health That's in a minute. From Chicago Public Radio and Public Radio International when our program continues.

Act Three. Get Rich or Die Trying.

Ira Glass

This American Life, I'm Ira Glass. Each week on our show, of course, we choose a theme, bring you different kinds of stories on that team. Today's show, million dollar idea, stories of great ones, and less successful ones. We have arrived it act three of our show, Act Three, Get Rich or Die Trying. Chana Joffe-Walt has the story of our next million dollar idea, a very, very ambitious idea.

Chana Joffe

This particular million dollar idea was to take something generally seen as bad and turn it good, death. I think it's safe to say, universally seen as a bad thing. So take that and make people see good in it. That was the plan.

It started in Prague in 1999. A couple law makers begin unwittingly laying the groundwork for a million dollar idea, by doing something tedious, something lawmakers always do, talking about the budget, specifically talking about raising taxes on cigarettes to cover that budget. Czech reporters then began doing something tedious reporters always do, randomly asking smokers on the street for their two cents.

Prague Reporter

On a busy Prague street, some shrugged saying at most, they would cut down, while others admitted once prices rose, they would consider quitting for good.

Prague Smoker 1

I guess I'm going to have to quit. What can you do? I'm a pension earner. And it really hits my pension check. I've already reduced the number I smoke to only ten a day.

Prague Reporter

Definitely it's a good thing. I'm for it. When the prices go up, it will force me to consider whether I really want to put my money into cigarettes instead of, for example, sport.

Chana Joffe

You know whose dog whistles that only dogs can here, this kind of man on the street news clip where people are casually throwing around the words quit, and put money somewhere else, is a tobacco executives dog whistle. They pay attention immediately. And that attention is undivided.

Those smokers in 1999 more than likely smoked Phillip Morris cigarettes. The company was the largest manufacturer in the Czech Republic by far, and the largest in the world. And there was something specific about the Czech taxes conversation that got under the skin of Phillip Morris executives. It was this. Legislators were arguing that tax increases were necessary because smoking hurt the economy. People get sick from smoking. And in a place like the Czech Republic with public health care, the government has to pay for that.

This particular logic struck the Phillip Morris people as bizarre. Not just bizarre, wrong. And so inspired by accuracy and the threat of taxes, Phillip Morris came up with their million dollar idea.

Gordan Fairclough

Well, they commissioned a study to tote up the costs and the benefits to the Czech government of its people's smoking habits. Gordan Fairclough covered tobacco for the Wall Street Journal. And he says, "In its simplest form, the idea was this, death, death saves you money, the more complicated form, a 28 page economic analysis.

Chana Joffe

Could you just read the executive summary of that study, just the bolded part?

Gordan Fairclough

The bolded part, OK. So the beginning of the study says, "Based on up to date reliable data and consideration of all relevant contributing factors, the effect of smoking on the public finance balance in the Czech Republic in 1999 was positive, estimated at CZK 5.8 billion.

Chana Joffe

Quick currency conversion interruption, CZK 5.8 billion in 2000, that's after $147 million a year, coming largely from tobacco-related taxes, but also from other things.

Gordan Fairclough

So basically, you know, what they're trying to do here is tote up here the gains and losses to public finances from smoking. So if you have people smoking and their life span is not as long, you record big savings on housing for the elderly, for example, [INTERPOSING VOICES].

Chana Joffe

Because people die?

Gordan Fairclough

Because people die. Because people die early, you also pay less out in pensions and other social benefits to the elderly. People die early, you don't have to pay health care costs for all their non-smoking-related illnesses that they would get later in life, all of which in this study are seen on that kind of positive side of the ledger.

On the negative side, you have the costs of fires started by people smoking, falling asleep in bed smoking, doing other things with cigarettes. The financial implications of people who stop working earlier, either because they die or they get too sick to work, so the state then loses the income tax that they might charge those people. Also on the cost side is, the cost of treating people for smoking-related diseases and for secondhand smoke.

So the way these consultants tote that all up is people smoking is a net benefit, a net financial benefit to the Czech state of that CZK 5.8 billion.

Chana Joffe

The report is thorough. It begins by laying out its methodology, then later its quantification methods, concluding with a glossary that defines morbidity and mortality. Turns out-- who knew-- the technically uses of those two words are very different. And then five pages of references. Gordan Fairclough and I spent a long time reading through it together.

Gordan Fairclough

So you don't have to pay that. You don't have to pay the monthly insurance payments paid from the state budget for each pensioner, each retired person. Then you multiply that out by the 22,000 deaths due to tobacco smoking in the Czech Republic in 1999 with a nice reference to an epidemiology, one of the most famous of the tobacco controlled epidemiologists there.

Chana Joffe

So this is a weird thing. To get all these numbers to make their argument, Phillip Morris had to go to the only people who collect these numbers, their enemies, public health people, tobacco control lobbyists, basically anti-tobacco people.

Gordan Fairclough

You know what the tobacco control people would tote up as the harm of smoking, and Phillip Morris is toting up as the benefit to the Czech state.

Matt Myers

I read the report and couldn't believe that they had put it in writing.

Chana Joffe

This is one of the tobacco control people, Matt Myers. He works for the Campaign for Tobacco Free Kids in D.C. In the years leading up to the Phillip Morris study, Matt and a lot of other anti-tobacco people had done some research that told them to ease up on the smoking is bad for you message, and instead, focus on a message that seemed like it would be a lot more effective. Tobacco companies are bastards and they're out to get you.

Matt Myers

For us, a report like this was truly like manna from heaven. This report was a complete gift. The next thing I did was sit down with our communications people and say what can we do with this?

Chana Joffe

The story ran in the Prague Post. Gordan wrote it up for the Wall Street Journal. It then quickly made it to CBS Evening News, ABC World News Tonight, in New York Times, and USA Today among many others. Some select newspaper headlines, "Death in the Ashes", "Tobacco Blows its Smoke" and "Smoking Cuts Elderly Costs and Elderly". Matt Myers and several other tobacco people ran there own ran their own ad campaign featuring a corpse at the morgue with a price tag dangling off a grey, big toe.

Matt Myers

Let me put it this one, in one fell swoop, it allowed us to counter over $100 million of tobacco advertising. And that felt good.

Chana Joffe

Is was worth $100 million?

Matt Myers

Yes in critical respects. Getting our hands on that report allowed us to do with almost no funds, what the tobacco industry had spend $100 million trying to do.

Chana Joffe

Phillip Morris apologized, then apologized again. Top executives repeated that they never authorized the study, that it was done by a Czech subsidiary of Phillip Morris without headquarter's permission. They issued public statements such as, "All of us at Philip Morris are extremely sorry. No one benefits from the very real, serious, and significant diseases caused by smoking".

And their public relations guy in Prague, [UNINTELLIGIBLE] did one recorded interview, one poorly recorded interview with Czech Radio.

Phillip Morris Representative

We commissioned this study and it was not about health policy. But it was a part of an ongoing debate about the economics of cigarette excise tax policy in the Czech Republic. And I must say Phillip Morris deeply regrets any impression from this study that a premature death of smokers represents a benefit to this society.

Chana Joffe

I talked with several Phillip Morris people from that time. Not one and them would allow me to record. So here's what I learned, In the midst of the media disaster, Phillip Morris set out to make sure this kind of thing never happen again. The company called a meeting in Switzerland, all the bosses from around the world came in, about 15 men, maybe a women or two were there. No one quite remembers.

And at that meeting, the guys from headquarters announced to the room, "You are not to talk about the death benefit, not in your reports, not in public, not ever again. We are not doing this anymore".

The group listened to this for awhile. And then a single hand rose. "Excuse me, but they were the ones saying smoking costs the government more than it saves. Are we supposed to just let him lie?" Then there were more hands. "Yeah, what do you mean"? More than one person piped up with, "You're asking us to argue with one arm tied behind our back". And most popular of all in that room on that day, "But it's true. What we're saying is true. Early death does save society money".

Gordan Fairclough, a reporter with the Wall Street Journal would go to Phillip Morris headquarters during this time for interviews. And he says people really did seem incredulous at the negative response.

Gordan Fairclough

I think they become kind of hardened to this. There's a certain psychological distancing that goes on by tobacco executives, doing that work and selling this product knowing that it is, in fact, addictive, and knowing that it has such serious health consequences. And I think that some of that allows you to look at a report like this and not think to the average member of the general public this is going to seem incredibly callous.

Chana Joffe

It must be so strange for them too because there was such a long period of time where they were denying that smoking killed people. And now finally they're saying we're acknowledging it. We're writing the death benefit into our equations and you guys are still giving us crap.

Gordan Fairclough

That's true. They must have thought that was fairly ironic that, in fact, here they are admitting that this will end everyone's life earlier, and then they get slammed for it.

Chana Joffe

But after that, the tobacco people shut up about the death benefit, they fell in line, and they never publicly mentioned it again. The anti-tobacco people, though kind of won't let this go. They could have called attention to the study, declared outrage, mocked it, all of which they did do. And then they could have named the whole incident a success and walked away, which weirdly they did not do.

Instead anti-tobacco people have spent the last decade trying to prove that the data, not just the moral question of counting deaths on the plus side of an economic analysis, but the actual data Phillip Morris is using was wrong, which when it comes to this study, seems a little bit besides the point. Doesn't it?

These guys clearly won this round, clear victory for tobacco control people, battle won. But they won't drop it. Instead, Matt Myers, with the Campaign for Tobacco Free Kids, has been doing his own studies about whether or not smokers save the government money. And his number show they do not.

Matt Myers

What we thought the data showed, and what it turned out that the data showed, was that tobacco was an enormous net drain on the economy. I think the numbers are very wrong.

Chana Joffe

But it seems like part of the power of your position here is that you get to say look at those guys measuring the value of your death and the benefit of your death, that's ridiculous. And that's it. But then you are too. You're also doing your own economic analysis.

Matt Myers

We're very clear. Efforts to reduce tobacco use have nothing to do with economic costs. They have everything to do with quality of life.

Chana Joffe

But you are doing economic analyses. You're doing cost-benefit studies yourself.

Matt Myers

We did not start out making that argument. The public health community began to look at the economic issues only because the tobacco industry argued that as a society, we couldn't afford to reduce tobacco use. We have to respond to the tobacco industry's argument.

Chana Joffe

In other words, they started it. And now it is on. So here we go, were they right? Does the fact that smokers die early mean that they save the rest of as money? Now Phillip Morris is obviously not the place you would go for an answer to that question. But luckily it is a question economists ask all the time about smoking and alcoholic obesity.

And the way they do it is they go through all the costs to society. Payment for lung cancer treatment, that means everyone's insurance rates go up, more sic days. Subtract the savings to society, pensions aren't paid out plus spent on nursing home care because people die sooner. And they total it all up. And eventually most economists come to this unsatisfying conclusion. It about evens out. Smokers probably cost society a little bit more than they save by dying early, but only a little. And they more than make up for that cost by paying taxes on their smoke.

People like Matt Myers have one mean beef with this approach. It doesn't count the cost to the smoker. The fact that the smoker will probably lose four years of his life, it doesn't count that. Tobacco control people want to contact that. They do count that. And when they do, they come to the conclusion tobacco costs society greatly, a conclusion they talk about in advertising and lobbying all the time now.

And on the other side, Phillip Morris is completely quiet on this front. They don't point out that the majority of economists don't agree with that conclusion. They don't publish their own counter studies. And they don't talk about the death benefit, at least not publicly. They are quiet and watch their million dollar idea continue to live, just not on their side of the balance sheet.

Ira Glass

NPR's Chana Joffe-Walt is part of the Planet Money team. Planet Money is a co-production of NPR News and our radio show. They bring you economic stories that are not boring on their blog and their free twice-weekly podcast at npr.org/money.

[MUSIC - "WINNERS NEVER QUIT" BY PEDRO THE LION]

Act Four. Don't Hate The Player.

Ira Glass

That's [UNINTELLIGIBLE]. Don't hate the player. Somehow we've gotten this far into the show without anybody trying to make a fortune with an old fashioned scam, or out betting the casino, or beating the odds in some impossible way. Well let's correct that right this second with the story from Shawn Allee.

Shawn Allee

In 1984, Michael Larson appeared on a CBS game show called Press Your Luck. He was just kind of contestant producers liked. He wore a simple grey suit, nothing flashing, and he had this aw shucks kind of smile like some guy from Ohio, when he was.

Game Show Host

Let's meet our second player, Michael Larson. How are you, Michael? Not Michael, what do you do for a living?

Michael Larson

Oh, I drive an ice cream truck in the summer. I hope to win enough money here not to do that this summer.

Game Show Host

Do you have it with you today?

Ira Glass

What producers that day didn't know, is that Michael Larson had come on to Press Your Luck with a plan, a kind of far-fetched plan, a take 'em to the cleaners, a plan that was months in the making, a plan to get rich in half an hour.

Game Show Host

$56,851 and he's going again.

Michael Larson

Stop

Game Show Host

Stop at $5,000.

[APPLAUSE]

Ira Glass

All his life, Michael was always running some little scam or another. Now Michael died in 1999. So you're not going to hear about any this from him. But I talked to his brother, James. Michael was the youngest of four boys. James was the oldest. James says even in middle school, Michael got caught smuggling candy bars into class and jacking the prices way above retail.

And James says after high school, though Michael was smart enough to go to college, he spent his time looking for easy ways to score.

James Larson

He didn't understand the value of good, honest hard work, and just go, and work, and do your job, and get your pay. He thought those people were fools.

Ira Glass

Michael's schemes ran the gamut. He started a business under a family member's name and then hired himself as an employee. Then he laid himself off to collect unemployment benefits. He'd watch for banks that would give you $500 for opening an account. He'd open one and wait the minimum time to collect the $500. Then he'd withdraw the money and do it again under a different name.

His house was filled with stacks of newspapers everywhere, and boxes, and piles, which he'd scour for possible scams. He never threw anything out. He might need them something, he'd say.

James Larson

He used to sit at night and watch the TV and tape all these shows that you see on late night TV. You can make thousands of dollars by doing this or doing that. And he bought into that very much so.

Teresa Bertram

He had a TV in the bathroom. He had one in the bedroom. He had one in the kitchen. He would just carry them in.

Ira Glass

This is Michael's former common law wife, Teresa Bertram .

Teresa Bertram

He had like 12 in the living room lined up on the walls. They were the old consoles. And he would have one sitting on top of it and the other one sitting on top. And we had an entire wall full of 19 inch, 25 inch televisions. And he would watch them all at once. It got so hot back here it peeled the paint off the wall.

Ira Glass

Teresa says she had a tough time explaining this TV business to visitors. Usually she'd just tell people Michael was straight up crazy. But Teresa says he was actually methodical with his TV viewing. He'd tune each TV to a different channel. The idea was to watch for anything that would make him rich. He's also watch TV ads, infomercials, and of course, game shows.

Teresa Bertram

He was intrigued with the game shows. And he wanted to find one that he could do.

Ira Glass

Michael was convinced that someone smart could find loopholes in game shows that average people missed. So he'd videotape them all day and play them back in the evening. Teresa says sometimes he'd stay up all night fast-forwarding, rewinding, pausing, and re-watching, especially Press Your Luck.

Teresa Bertram

I remember I was in the kitchen and he yelled for me to come into the living room. And he was real happy and excited. And he said, I've got it. I've figured it out.

Ira Glass

To understand what Michael was so excited about, you have to understand how Press Your Luck worked. If you don't know the show or remember it, maybe you've heard its catch phrase, big bucks, big bucks, no whammies.

Three contestants would take turns at the show's big game board. It was like a huge Monopoly board with squares around the edge. When a player took a turn, a light would bounce all over from square to square in no particular order, until a player would press a big red button and the light would stop. If they were lucky, the square they landed on would have a prize like a vacation trip or money. But if they weren't lucky, they'd hit a whammy. And they'd lost all the prizes, the money, everything.

All of the sounds simple enough. But here's the thing. To you, to me, and to the rest of America, the light on the Press Your Luck game board moved randomly. Michael knew we were wrong. Michael figured out that really there was nothing random about that game board. The light always moved in one of five patterns.

Teresa Bertram

He was memorizing the patterns. He wrote some stuff down. He took little notes. And then he started doing the VCR and hitting the pause button. He would show me in here because he got really excited then. Watch this. I can stop it every time where I want to.

Ira Glass

Michael spent months learning to push his VCR pause button at just the right moment, always on a prize, never on a whammy. Again, here's his brother, James.

James Larson

When Michael told me he was going to go to California, I didn't think he'd had a chance. I thought he'd get out there and find that it's not as easy as you think it is. And so I said good luck. But don't call me for bus money to get back.

Ira Glass

Which brings us back to the show.

Game Show Host

Michael Larson. How are you, Michael? Now Michael, what do you do for a living?

Michael Larson

Oh, I drive an ice cream truck in the summer.

Ira Glass

Michael took his seat on Press Your Luck on May 19, 1984. Watching the tape, his grey hair is slicked back receding a bit. His beard is halfway to grey. He looks nervous.

Game Show Host

Well, Michael, you want to earn enough money so you don't have to deal with your ice cream truck. You just want to eat the ice cream though.

Michael Larson

No, I've done enough of that, too.

Game Show Host

You've kind of OD'ed on ice cream, right? Well hopefully you won't OD on money, Michael.

Darlene Lieblich Tipton

It was for me a very, very routine day.

Ira Glass

Darlene Lieblich Tipton was in the control room with the director and producers. Her job was to monitor the game and make sure everything was fair and square.

Darlene Lieblich Tipton

I am looking at the same monitor that the director is looking at. So I see all the camera angles, all the shots. It's actually the best seat in the house.

Ira Glass

Darlene says at first, Michael Larson didn't look like much.

Michael Larson

I'm going, stop.

Game Show Host

He got a whammy.

Ira Glass

Right here, after getting a whammy on his first spin, Michael shakes. his head, grits his teeth, and forces a smile. He looks unsure of himself. On his next turn, he concentrates before hitting the red button, and lands on $4,000 dollars and extra turn. Sure he smiles. But more than anything, he looks relieved.

After that he gets more confident. Turn after turn, he wracks up more and more money. By 18 grand, he reels back in his chair. At 21 grand, he waves his fists above his head. By 28 grand, Michael is literally bouncing in his seat. He's on a roll. And Michael, the host, the audience, everybody, they're all getting into it.

Darlene Lieblich Tipton

It wasn't unusual for contestants to go on streaks. It was kind of the way the game was designed. After about, oh, I don't know, five to ten spins of the board, that's when it started to become obviously to people that he was hitting the same prize in the same square just about every time. And that skill, that's not random, and it's not luck.

Michael Larson

Stop.

[APPLAUSE]

Darlene Lieblich Tipton

He could aim and hit, which we didn't think was possible. And he continued to do it. Nobody else had ever done it that way. Everybody else had played it virtually like a slot machine. You just hit the button and it stops where it stops. He had it down to a skill, a fine art.

Michael Larson

Stop.

Game Show Host

at $4,000 and a spin.

Darlene Lieblich Tipton

I've been in the booth for thousands of episodes of game shows, never one like that. First the booth got very quiet. And then there was an oh my god, oh my god, oh my god. It was what do we do? What do we do? People were turning to me saying can we stop this?

He wasn't breaking any of the rules of the game. I could not stop the game. He was playing it according to the rules set out. We had no rule against what he was doing. He beat us at it. We have to let it play out the way it plays out and see what happens.

Michael Larson

Stop.

Game Show Host

$5,000 and a spin.

Ira Glass

Michael's streak had gone so long that he busted the show's half hour format. The host did an impromptu interview to add time so the episode could be stretched into an hour-long special. (SUBJECT) GAME SHOW HOST: What are you going to do with the money, Michael?

Michael Larson

Invest in houses.

Game Show Host

Real estate.

Michael Larson

Yes, real estate.

Game Show Host

And not drive an ice cream truck.

Michael Larson

That's right.

Ira Glass

By the end of the show, Michael Larson had won a total of $110,237. Michael had shattered records that day, and not just for Press Your Luck, but for any American game show. He'd won more than anyone ever had in a single episode.

Game Show Host

Congratulations. Spend it wisely. And get your daughter a lovely birthday gift.

James Larson

I was happy for him. But I was worried that he might squander the money in some way.

Ira Glass

Again, Michael's brother, James.

James Larson

Well yeah, I tried to get him to look at some reasonable investments, maybe buy some real estate. And he just put it into the bank, which is, I thought, a very wise move. Then after a couple of months, he took some of it out. I said, "What are you doing"? He says, "I'm trying to win this contest that they have on a radio station in Dayton. And you have to get a certain serial number".

Teresa Bertram

Every day they would give a serial number out on the radio. And if you can match that serial number on a $1 dollar bill, then you won $30,000.

Ira Glass

Again, Teresa, Michael's former wife.

Teresa Bertram

That intrigued him to, "Well, I should be able to do. I got more $1 bills than anybody else around here". So it took him over two weeks. And it took him five different banks to get $100,000 and bring it in. And he was bringing it in like every other day in a burlap bag. And he even carried it in in a green trash bag. The federal reserve puts $1 bills in $4,000 dollar packets on a piece of little, thin balsam wood, and it's shrink-wrapped. We had like six of those under the bed. You walk into our bedroom and you could see them all lined up under the bed.

Ira Glass

They also stacked hundreds of dollar bills on TVs, VCRs, the stairs, and just about everywhere else. After they had the 100 grand, they closed the shades and they hunkered down.

Teresa Bertram

We would sit and go through this money looking for these serial numbers. You had a few days to turn it in. So we had several numbers we were looking for. It took us a weeks to go through half that money, literally go through it. Because you have to eat, and bathe, and do other things.

Ira Glass

Day after day Michael and Teresa sorted the money into grocery bags and piles. They weren't finding the numbers the match the ones announced on the radio. So Michael put half the cash back in the bank. That left 50,000 $1 bills sitting in trash bags, hanging out of drawers, and falling out of closets. They were exhausted. So one night they took a break.

Teresa Bertram

We went to a Christmas party about 8 o'clock that evening, 7:30, 8 o'clock. And we were there for a long time. When we got home, it was near 1 o'clock or something. The back door was kicked in and his cash is gone.

The first thing he asked me was did I take his money. I said, "No, I didn't take your money. I was with you". "Well you had somebody do it." "No, I didn't have anybody do it".

Ira Glass

To this day, this robbery has never been solved. But at the time, Michael was convinced Teresa had something to do with it. The police questioned Teresa several times. They turned up nothing and gave up. Michael didn't.

Teresa Bertram

He kept watching me real close at night. And I mean he would come in and just stare at me and stuff. And I just had a feeling he was going to try to kill me. Yeah. He was going to put a gun to my head. At night while I was asleep, he'd come in and stand and just stare at me. And it gave me the creeps really bad.

So one day I just decided that while he ran to the store, and that's when I got my kids, and left, and went to a hotel, ordered a couple of pieces, and we just stayed there. And I called him and told him to get out of my house.

Ira Glass

After this point, Teresa and James say their picture of what Michael was up to is sketchy. Here's what we do know. Michael moved back to his little hometown outside Dayton, Ohio and he found a new girlfriend. In 1999, nine years after Michael's big win, Michael and this girlfriend suddenly fled Ohio.

Teresa and James later learned why from federal investigators. The pair was caught up in a huge scam that combined a pyramid scheme, fake investments, and Indian lotteries. Altogether 20,000 people were conned out of $3 million. It was also the first major internet fraud that the Securities and Exchange Commission ever investigated. The SEC and the FBI hundred Michael and this woman for almost four years until 1999 when Michael died in Florida from throat cancer.

Teresa says even today she has bad feelings about how Michael treated her. After all, he accused her of taking his money. And when Michael ran away from the Feds, he left behind a son he'd had with Teresa. Because of that, it's easy to get her to say bad things about him, about the kind of person he was. That makes this one thing she said kind of surprising, which is that it actually bothers her when sometimes people say he cheated Press Your Luck out of money. They call what he did a scandal or a scam.

Teresa Bertram

I will say the game show is one thing he did do that was honest. He didn't cheat. There's no cheating to memorizing something. He'd sit here for six months and studied it. That was pretty amazing.

Ira Glass

But Michael's brother, James, still has mixed feelings about Michael's performance on Press Your Luck more than 25 years later.

James Larson

Well I fell that by winning the game show, that was the start of his downfall. Him winning that large amount of money convinced him in his own mind that he could trick anybody, that he could do just about anything.

Ira Glass

I ask him, if there was some way for him to go back and change what happen, maybe rig the game so Michael would have lost on Press Your Luck, would he do it? James says no. He's glad Michael won. He just wishes his brother had been a different person, the kind of person who could just be happy with what he's got.

Game Show Host

Michael, when you had $30,000, $40,000, $50,000, what was in your mind? Why did you keep going?

Michael Larson

Well two things, one, it felt right. And the second was I still had seven spins, and if I passed them--

Ira Glass

Shawn Allee in Chicago.

[MUSIC - "I NEED A DOLLAR" BY ALOE BLACC]

Credits.

Ira Glass

Our program today was produced by Robyn Semien and me with Alex Blumberg, Ben Calhoun, Jane Feltes, Sarah Koenig, Jonathan Menjivar, Lisa Pollak, Alissa Shipp, and Nancy Updike. Our senior producer is Julie Snyder. Seth Lind our production manager, Emily Condon our office manager, music help from Jessica Hopper, production help from Brian Reed and Shawn Wen. Mina Hochberg helped produce our story about Vietnamese sandwich shops in Brooklyn.

[ACKNOWLEDGEMENTS]

Our website, thisamericanlife.org. This American Life is distributed by Public Radio International WBEZ. Management oversight for our program by our boss, Mr. Torey Malatia who knows that you still do not have you weekend plans totally sewn up, you don't know exactly what you're going to do still, he has a suggestion.

Kumail Nanjiani

Just do the heroin. You already have heroine. Just do the heroin.

Ira Glass

I'm Ira Glass, back next week with more stories of This American Life.

[MUSIC - "I NEED A DOLLAR" BY ALOE BLACC]

Narrator

PRI, Public Radio International.