If you have $5 dollars in seed funding and only 2 hours to make it happen, what would you do to make the most money?
This is known as the Stanford $5 Challenge. Tina Seelig asks this of her students enrolled in the Stanford Technology Ventures Program at Stanford University.
Most students, she explains, would use the money towards buying a lottery ticket or gamble away the money at Las Vegas. These students assume that the $5 is too little money to do much with, and engaging in high risk/high reward activity is the way to go to net the most profit.
Surprisingly, the teams that make the most money kept the $5. Instead, they reframed the problem and challenged assumptions. Focusing on the $5 seed money framed the problem too tightly. Seelig tells of students who looked for opportunities around them. One team set up a free bike tire pressure check-up service outside of Stanford Student Union. They charged a few dollars to re-inflate tires. Stanford students were appreciative of the service, so much so that they generated a higher profit when they switched to a by-donation model. Another team secured reservations in local restaurants for diners and sold them for a profit. The team that made the most money did something even more inventive: they sold their three-minute slot, when teams were to present to their classmates on their strategy, to the very same companies that wanted to recruit the program’s graduates.
Lessons learned: The take-away here is one of learning to think innovatively and creatively. Identify what the perceived problem to be. Identify what assumptions are at play that frame the initial problem formulation. Then, question those assumptions at play. Finally, reframe the problem.
You can watch Tina Seelig talking about the $5 Challenge here. Tomorrow, I’ll explore the implications of this challenge for developmental evaluators and design-minded evaluators.