Campus Stories: $5 + Two Hours for Stanford Students
If you only have $5 and two hours of time, how are you going to make money with it? I give the same assignment to my students at Stanford. I divided them into 14 groups and gave each group an envelope containing $5 in "startup capital." They can plan for as long as they want before opening the envelope, but once the envelope is opened, they only have two hours to monetize the $5. The event starts Wednesday afternoon and ends Sunday evening. By Sunday night, each team had to send me a PowerPoint presentation explaining their specific actions during that time, and the details of the activities were to be presented to the class the following Monday afternoon.
Before, the answers I heard most often were "go to Las Vegas", "buy lottery tickets". The chances of people who answer this way making a lot of money are very slim, because the risk is too great. The second piece of advice I hear most often is to use the $5 to buy some starter materials and then set up a stand to wash someone else's car or sell some lemonade. For those who want to make a little money in two hours, this kind of advice may be a good choice. My students, however, gave some "unconventional" answers.
A team discovered a common problem in many college towns: every Saturday night, there are often long lines at the door of popular restaurants, and it is difficult to wait for a table. They decided to make money on people who didn't want to spend their time waiting in line. So the two of them made reservations to several restaurants separately. When it's time to eat, sell reserved seats to people who don't want to wait in long lines for up to $20 each!
Another group has a simpler approach. They set up a booth in front of the student dormitories, and they test the air pressure of bicycle tires for free, and charge a $1 fee if the tires need to be inflated. At first, they felt that they had taken advantage of their classmates, because they could go to the nearby gas station to fill up the gas for free. But after doing a few deals, they found that customers were actually very grateful to them. Although their service is not difficult, and there are inflatable places nearby, the service they provide is undoubtedly more convenient and valuable. Just halfway through the specified time, this group of team members changed their strategy from the original fixed fee to the form of voluntary payment by customers. As a result, their turnover began to grow by leaps and bounds. Clearly, customers are more willing to pay a little more for this potentially free service.
Both sets of projects managed to generate hundreds of dollars for their respective teams and much admiration from their fellow students. However, the group that made the most money reallocated resources in a completely different way and managed to make $650. This group of students felt that the most useful asset they currently had was neither the $5 nor the two hours of activity time, but those precious 3 minutes used to show the details of the event. They decided to sell the 3 minutes to a company that wanted to recruit students in the school. They made a 3-minute job advertisement for this company, and played it to the students during the presentation time on Monday. This is a very smart move, because they can see that they have an asset, and this asset is amazingly valuable, waiting for them to develop.