How to Grow Your Money: Lessons from a Stanford Experiment with Only $5

Have you ever wondered what you could achieve if you only had $5 and two hours? Tina Sellig, the executive director of the Stanford Technology Ventures Program (STVP), posed this challenge to her students one day. She presented them with a simple task: to generate as much money as possible from this meager sum in two hours. The teams had from Wednesday afternoon until Sunday evening to complete the assignment. On Monday, they had three minutes to present their project to the class.

Sellig wanted to encourage her students to think outside the box, identify opportunities, challenge assumptions, and be creative. She gave each of the fourteen teams an envelope with $5 of “seed funding” and told them they could spend as much time as they wanted planning. However, once they cracked open the envelope, they had only two hours to generate as much money as possible.

The teams came up with various approaches, but the ones that made the most money did not use the $5 at all. They took a different approach to the problem, one that was more comprehensive and adaptive. They focused on identifying problems in their midst, ones that they, or others, encountered or experienced. Then, they worked, leveraging whatever skills and resources they had, to find solutions to these problems.

Some of the ideas were remarkably inventive. One team, for example, identified a common problem in college towns – the long lines at popular restaurants on Saturday night. The team decided to help people avoid waiting in line by pairing off and making reservations at several restaurants. As the time approached, they sold each reservation for up to $20 to customers who were happy to avoid a long wait. The team learned that female students were more effective at selling these reservations than male students, probably because customers were more comfortable accepting them from young women.

Another team set up a stand to measure bicycle tire pressure for free in front of the student union. They charged $1 to add air to the tires that needed it. Initially, they thought they were taking advantage of their fellow students, who could easily get their tires filled at a nearby gas station. However, they soon realized that the bicyclists were incredibly grateful. Even though the task was simple and easy for the students to perform, they were providing a valuable and convenient service. They quickly transitioned to requesting donations instead of asking for a fixed price, and their income soared.

However, the most profitable team identified their most valuable resource: their three-minute presentation time on Monday. They sold it to a company that wanted to recruit the students in the class. The team created a three-minute “commercial” for the company and showed it to the students during the time they would have presented what they had done the prior week. This strategy netted them $650.

The STVP experiment highlighted the importance of adopting a different mindset when dealing with problems. Focusing too narrowly on resources, such as money, can be counterproductive. Instead, one must look at the broader picture and adopt an adaptive, iterative approach that leverages all available resources, including hidden and intangible ones. The teams that were successful in the experiment thought creatively, identified problems that were not necessarily at the front of anyone’s mind, and used their skills to solve them.

This lesson applies not only to the STVP experiment but also to everyday life. We need to challenge our assumptions, take advantage of hidden advantages, and push the boundaries of what is possible. For example, instead of relying on a single source of income, we can explore additional streams that may not be noticeable at first glance. Freelance work, renting out a spare room, or promoting a hobby or skill through social media are examples of how we might leverage our talents and time to build wealth.

In conclusion, it is possible to grow our money, even with limited resources. We must be creative, identify problems, and use our time and strengths wisely. As Sellig’s STVP experiment shows, the most significant returns can come from adopting a broader, more adaptive approach to problem-solving. With the right mindset and creativity, $5 or less can turn into a significant sum.