Deal or no deal
(Or: “You moron, please take the money and go home.”)
Deal or No Deal starring Howie Mandel has returned on CNBC.
The TV game show struck ratings gold a decade ago to grab the attention of those who study investors, entrepreneurs and human nature. Deal contestants picked a suitcase from 26 that had hidden amounts from 1 cent to $1 million. The remaining cases were opened one by one, and contestants periodically took the deal offered to them to stop, or––more often––said "no deal" for a chance to win more. It seemed simplistic, but the psychology was not unlike the dot-com days when investors rode stocks up and then back down to nothing.
Here’s my Q&A with Mandel from the summer of 2006
Q: When you first saw the premise of the game, did you think it would become a hit?
A: Absolutely not. I turned it down three times. There's no trivia. There's no stunts. There's nothing. There's no skill. It's not really a game. It's a great study in human nature. It's a psychological game.
Q: Fear vs. greed drives markets, and it drives your show. Which is more powerful?
A: It's not fear vs. greed: It's fear vs. dreams. Some are comfortable leaving with nothing because they came with nothing. That's why they give you chips in Vegas, so you won't think it's your money. The offer can be $250,000, but many don't want to lose the chance at $1 million. It's not a philosophy I live by: $50,000 is a down payment on a home. It will put your kids through college. It's a life-changing amount. The hardest thing about my job is not to throttle contestants and say: "You moron, please take the money and go home." I come home depressed. When I watch the show, I scream at the TV.
“It’s not fear vs. greed. It’s fear vs. dreams.”
Q: The deal is considerably less than the average of the amounts remaining. Therefore, from a pure probability standpoint, "no deal" seems the logical choice.
A: As host, I can't make a recommendation. The reason I moved to America (from Canada) is because this is the land of opportunity. What I love about this game and what I love about this country is that go-for-it attitude. I get it. But there is something to be said for the old lady who buys bonds.
Q: Suppose you were playing the game. Two suitcases remain, one with $1 million and the other with 1 cent. How large would the offer have to be for you to accept the deal?
A: Like $300,000. It's amazing how many people will play on because they will never again have a 50-50 shot at $1 million. Not me.
Q: Would you be disappointed if you took the $300,000 and passed up $1 million?
A: I wouldn't. I play it safe. I make a decision and feel good about it. It's like stocks. You set your marker at $80 a share and you sell at $80. Some will look at the paper every day and get angry if it goes to $90. Half the people who play Deal are happy with their decisions. Then there are people who coulda, shoulda, woulda, people who get angry. The guy who has the best job on the show is Sammy. He drives contestants back to the airport. He'll hear people screaming and swearing. Others are happy.
Q: Contestants seem to take more risk after they see their offers dwindle.
A: People tend to throw good money after bad. They do that in the stock market and on my show.
Q: Are women more risk averse? Do more male contestants take the game to the limit?
A: The opposite. More women take the ride all the way. The biggest winners and the biggest losers have been women.
Q: Can you tell right away from a contestant's personality or body language if they are a risk taker or risk averse?
A: No. But they change. They come to the game with a plan. They say, "If I get a $100,000 offer, I'm going home." One lady's dream was $75,000 to open a pastry shop. She turned down an offer for $78,000. The offer went down to $30,000, but then she played on and it went back to $76,000. Opportunity knocked twice. She said, "No deal" and went home with $5. Her strategy changed mid-game. If you have a plan, stick with it. Think about the worst-case scenario when you invest or go into business.
" One lady's dream was $75,000 to open a pastry shop. She turned down an offer for $78,000. The offer went down to $30,000, but then she played on and it went back to $76,000."
Q: How important are outside influences
such as pressure from family and friends, the audience and gorgeous models?
A: People always turn to me and say, "It's so weird, it's so different (than watching on TV). I feel I'm dreaming. It's surreal." You're surrounded by lights and the crowd. It's like a Roman coliseum, and you're being thrown to the lions. The adrenaline is going. It's an amazing mind game. Again, you need to stick with the plan. You can't get emotionally involved.
Q: Entrepreneurs with successful start-ups get offers to sell the company. They have little clue about the long-term value of the company. Should they take sure money now, or gamble on becoming the next Bill Gates?
A: The risk of selling is that you may be giving away something very valuable. Forget about the future of the company for this moment. If you take that money now, what else could you build?
Q: How do you invest?
A: I'm risk averse. I'm not in stocks or even mutual funds. I'm into real estate and mortgages.
Q: Real estate isn't risk free.
A: No, but it's more calculating. I'm more comfortable with it.
Q: Being a celebrity is a long-shot profession. You say you're conservative, but you took a big gamble with your career.
A: I had my own carpet company in Canada and was making close to six figures in 1977. I went on amateur night at the Comedy Store. I was in my early 20s, and I said I'm going to give up the business. From there, I did a TV show called Make Me Laugh. I did Merv Griffin, Mike Douglas and became the opening act for Diana Ross. I made $9,000 the first year. But there wasn't any risk. We were young. I told my wife that the day I can't pay the rent I'll go back into business. The odds of making it in show business are ridiculous. But I was pretty level-headed. From the time I was 13, I've been able to make a living.
About Howie Mandel
✓ Native of Toronto. Sold his successful carpet business to go into show business.
✓ Expelled from high school for telling a construction company that he was on the school board and ordering an addition to the high school.
✓ Color-blind. Germ phobia. Won't shake hands.
✓ Just turned 63. Married to Terry (Soil) Mandel for nearly 40 years. Three children, ages 28 to 33.
✓ Show business career began in 1979 when he visited Los Angeles and friends coaxed him to appear at the Comedy Store on amateur night.
✓ Played Dr. Wayne Fiscus on TV show St. Elsewhere. Creator and producer of children's series Bobby's World, which ran eight seasons on Fox and was syndicated in 65 countries.
✓ Deal or No Deal is based on a show that originated in The Netherlands.
Mandel's tips
• Think worst-case. There is nobility in being risk averse.
• Have a plan. Stick to it. Don't let emotions change your plan
.• Be satisfied with good fortune, not what you "coulda, woulda, shoulda" had.
Howie Mandel is among 64 leaders included in Advice from the Top: 1001 Bits of Business Wisdom edited by Del Jones. The book focuses on the leadership advice of Fortune 500 CEO's such as Fred Smith of FedEx, but also gets advice from athletes, coaches, entertainers such as Mandel and artists like Wynton Marsalis.
Jones recently published his first historical novel, The Cremation of Sam McGee built creatively upon the poetry of Robert W. Service. The novel is set in the 1898 heyday of yellow journalism and travels from Plumtree to New York to Cuba to San Francisco to Seattle and the Yukon. The narrator is a fabricating newspaper reporter working for William Randolph Hearst during the Spanish-American War and Klondike Gold Rush.
Purchase The Cremation of Sam McGee and posts a customer review on Amazon.com to receive an autographed copy of Advice From the Top. To receive the free book, please send your mailing address through “contact me” at this website.
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