25/01/2016
How much could you make with $5 and 2 hours? This is a very cool story from Tina Sellig (executive director of the Stanford Technology Ventures Program) who gave her students this exact question.
The result was an average 4,000% return(!) Here's what she said happened:
Each of fourteen teams received an envelope with five dollars of “seed funding” and was told they could spend as much time as they wanted planning. However, once they cracked open the envelope, they had two hours to generate as much money as possible. I gave them from Wednesday afternoon until Sunday evening to complete the assignment.
Then, on Sunday evening, each team had to send me one slide describing what they had done, and on Monday afternoon each team had three minutes to present their project to the class.
How did they do this? Here’s a clue: the teams that made the most money didn’t use the five dollars at all. They realized that focusing on the money actually framed the problem way too tightly. They decided to reinterpret the problem more broadly: What can we do to make money if we start with absolutely nothing?
They ramped up their observation skills, tapped into their talents, and unlocked their creativity to identify problems in their midst - problems they might have seen before but had never thought to solve. By unearthing these problems and then working to solve them, the winning teams brought in over $600, and the average return on the five dollar investment was 4,000%!
So what did they do? One group identified a problem common in a lot of college towns—the frustratingly long lines at popular restaurants on Saturday night. The team decided to help those people who didn’t want to wait in line. They paired off and booked reservations at several restaurants.
As the times for their reservations approached, they sold each reservation for up to twenty dollars to customers who were happy to avoid a long wait.
As the evening wore on, they made several interesting observations. First, they realized that the female students were better at selling the reservations than the male students, probably because customers were more comfortable being approached by the young women. They adjusted their plan so that the male students ran around town making reservations at different restaurants while the female students sold those places in line.
They also learned that the entire operation worked best at restaurants that use vibrating pagers to alert customers when their table is ready. Physically swapping pagers made customers feel as though they were receiving something tangible for their money. They were more comfortable handing over their money and pager in exchange for the new pager.
Another team took an even simpler approach. They set up a stand in front of the student union where they offered to measure bicycle tire pressure for free. If the tires needed filling, they added air for one dollar. At first they thought they were taking advantage of their fellow students, who could easily go to a nearby gas station to have their tires filled. But after their first few customers, the students realized that the bicyclists were incredibly grateful. In fact, halfway through the two hour period, the team stopped asking for a specific payment and requested donations instead. Their income soared.
For this team, as well as for the team making restaurant reservations, experimenting along the way paid off. The iterative process, where small changes are made in response to customer feedback, allowed them to optimize their strategy on the fly.
Each of these projects brought in a few hundred dollars, and their fellow classmates were duly impressed. However, the team that generated the greatest profit looked at the resources at their disposal through completely different lenses, and made $650. These students determined that the most valuable asset they had was neither the five dollars nor the two hours.
Instead, their insight was that their most precious resource was their three-minute presentation time on Monday. They decided to sell it to a company that wanted to recruit the students in the class. The team created a three-minute “commercial” for that company and showed it to the students during the time they would have presented what they had done the prior week. This was brilliant. They recognized that they had a fabulously valuable asset—that others didn’t even notice—just waiting to be mined."
That's Tina's story - and I love it - because it's all about the question "What would I do to deliver value and make money tomorrow if I was starting with nothing? I ask this question every day, and it forces me to look for the opportunities and value I would otherwise miss. What would you do?
Wealth isn't how much money you have. It's what you're left with if you lose all your money.
