412: Million Dollar Idea

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.

Ira Glass

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

Ira Glass

And the competitive, Henry's.

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.

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.

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

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

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.

Ira Glass

And then in the very next, he would say.

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.

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.

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.

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.

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.

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.

Ira Glass

Tim Rowe, venture capitalist at the Cambridge Innovation Center.

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

Ira Glass

Act Two, The Invention of Cheese. We follow all these business pitches now with an anti-pitch from Kumail Nanjiani. It's very brief, not from the MIT competition, for a new product you may have heard of.

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-Walt

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.

Chana Joffe-Walt

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.

Chana Joffe-Walt

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.

Chana Joffe-Walt

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.

Chana Joffe-Walt

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.

Chana Joffe-Walt

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.

Chana Joffe-Walt

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.

Chana Joffe-Walt

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.

Chana Joffe-Walt

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.

Chana Joffe-Walt

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.

Chana Joffe-Walt

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]

Ira Glass

Act Four, 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.

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.

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.

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.

Ira Glass

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

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.

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.

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.

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.

Ira Glass

Which brings us back to the show.

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.

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.

Ira Glass

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

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.

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?

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.

Ira Glass

Again, Michael's brother, James.

Ira Glass

Again, Teresa, Michael's former wife.

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.

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.

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.

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.

Ira Glass

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

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.

Ira Glass

Shawn Allee in Chicago.

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

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.

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.