If you had 5 dollars and 2 hours, how would you make as much money as possible? • Hacker News Board

Re: If you had 5 dollars and 2 hours, how would you make as much money as possible?

#71

Post by proee » Fri, Oct 30, 2009, 6:31 PM UTC

seldo wrote: post #51

nkurz wrote: post #46

Earlier quoted context omitted.

She teaches a class at Stanford and offers each team $5 of 'funding' in an envelope. She tells them that once they open the envelope, they have 2 hours to make as much money as they can. She cites three teams' approaches: 1) First team opens a free stand that offers to check peoples bike tire pressure for free, then charges $1 to inflate if necessary. This team changes midstream to accepting donations instead of char…

See, the problem here is that she hands out two artificial constraints, and then praises the teams who ignore the constraints. 1. Used a device to measure the tire pressure and materials to build the booth and signs. Did they cost less than $5? Maybe. Did it take less than 2 hours to create the booth, the signs, and perform the services? Unlikely. 2. Well done on finding something you can acquire for free and then se…

Well I understand what you're saying here, but you're over-thinking the problem (like an engineer). The point of the exercise was to get the students excited about entrepreneurialism.

The real world (read Wall Street) has plenty of constraints and people are always gaming the system to make a buck. So in this sense, it's a valid exercise.

Edit: In terms of "gaming the system" I'd like to think of this as leveraging opportunities in the system for a particular gain, not "cheating" the system.

Re: If you had 5 dollars and 2 hours, how would you make as much money as possible?

#72

Post by ednapiranha » Fri, Oct 30, 2009, 6:31 PM UTC

I'll tell you any easy way. It's less than $5. Get a hot girl, a free blog account, a PayPal account and take tasteful pics of her - ask for donations to get access to more pics of her.

Re: If you had 5 dollars and 2 hours, how would you make as much money as possible?

#73

Post by seldo » Fri, Oct 30, 2009, 6:33 PM UTC

proee wrote: post #71

seldo wrote: post #51

Earlier quoted context omitted.

See, the problem here is that she hands out two artificial constraints, and then praises the teams who ignore the constraints. 1. Used a device to measure the tire pressure and materials to build the booth and signs. Did they cost less than $5? Maybe. Did it take less than 2 hours to create the booth, the signs, and perform the services? Unlikely. 2. Well done on finding something you can acquire for free and then se…

Well I understand what you're saying here, but you're over-thinking the problem (like an engineer). The point of the exercise was to get the students excited about entrepreneurialism. The real world (read Wall Street) has plenty of constraints and people are always gaming the system to make a buck. So in this sense, it's a valid exercise. Edit: In terms of "gaming the system" I'd like to think of this as leveraging o…

Yes, because the lesson I really want people who are thinking of working on Wall Street to learn is that they should be trying to cheat the system.

Re: If you had 5 dollars and 2 hours, how would you make as much money as possible?

#74

Post by mechanical_fish » Fri, Oct 30, 2009, 6:33 PM UTC

seldo wrote: post #51

nkurz wrote: post #46

Earlier quoted context omitted.

She teaches a class at Stanford and offers each team $5 of 'funding' in an envelope. She tells them that once they open the envelope, they have 2 hours to make as much money as they can. She cites three teams' approaches: 1) First team opens a free stand that offers to check peoples bike tire pressure for free, then charges $1 to inflate if necessary. This team changes midstream to accepting donations instead of char…

See, the problem here is that she hands out two artificial constraints, and then praises the teams who ignore the constraints. 1. Used a device to measure the tire pressure and materials to build the booth and signs. Did they cost less than $5? Maybe. Did it take less than 2 hours to create the booth, the signs, and perform the services? Unlikely. 2. Well done on finding something you can acquire for free and then se…

Your argument seems to lean a bit too strongly on unsupported accusations of fraud:

Did it take less than 2 hours to create the booth, the signs, and perform the services? Unlikely.

What, you're saying that a team of college students, on a college campus, which presumably has a fully stocked stationery store within five minutes' walk, can't throw up some hand-scrawled signs in less than (say) 15 minutes for under five bucks?

Yeah, they probably had to already have the tire pump and gauge. I presume that "what do we have in our closets" was an important part of the process of choosing this business plan. ;) And I don't seem to recall anything in the "constraints" about not being allowed to beg or borrow anything, nor any rules about not being allowed to use stuff you already own. This isn't accounting class.

did they make the reservations at 6pm and then sell them before 8pm?

Why not? Remember: They're doing this in parallel, using multiple team members and multiple restaurants. And, given the anecdote ("this works better for restaurants that hand out little buzzers") we're not talking about the sort of reservation that needs to be obtained hours in advance. We're talking about people paying for the privilege of jumping the line and turning a 40-minute wait into a 4-minute wait. You can get through quite a few cycles of that in two hours.

Re: If you had 5 dollars and 2 hours, how would you make as much money as possible?

#75

Post by bonsaitree » Fri, Oct 30, 2009, 6:39 PM UTC

This is merely an academic "bounding/framing" exercise in every sense of the word. Pure entertainment.

A better measure of business creativity would be to allocate the same fixed budgets of labor and materials to all teams and record revenue, profits, and judge the sustainability of the solution at the end of a more reasonable operational timeframe--say 1 week.

The "winning" teams operated under entirely different working budgets for materials and labor during their prep time and 2 hour window.

It's made even worse as the professor immediately demerits the 'party' example due to the costs of the party supplies and setup. Apparently, Stanford student time & attention is "free" for one team, but worth $650 for the other.

Re: If you had 5 dollars and 2 hours, how would you make as much money as possible?

#76

Post by idm » Fri, Oct 30, 2009, 6:39 PM UTC

ankeshk wrote: post #54

idm wrote: post #29

Earlier quoted context omitted.

... and you've just created an inductive proof for how the US financial system collapsed. Don't get me wrong: I think step 3 has a good chance of working. BUT if you, like your customers, assume that a commitment is equivalent to the actual asset (i.e. the laptop) then you are vulnerable to defaulting on YOUR commitment if and when you cannot deliver the asset. How might that happen? Imagine you commit to purchasing…

While in theory you are correct, there are a few points to ponder upon: Laptops are not like stocks or other exchange commodities. As in, their prices won't fluctuate like crazy (unless of course you manage to get pre-order commitments to like 10,000 laptops.) At the scale we are talking about, we have a pretty good idea of what price discounts we'll get. And more importantly - who will be able to deliver them well.…

Agreed - delivery is the important aspect, when it comes to just-in-time order fulfillment. If they don't deliver, then you don't deliver either.

On your last point, I agree again: scale is critical. You describe something that might work once, given that there are no supply chain screw-ups or customer service problems. At the scale you describe, you can probably absorb any costs associated with these problems, but you will eat into your time and/or profit to do so.

My whole point is that the risk doesn't disappear just because you haven't invested any capital; you've just shifted the risk.

Re: If you had 5 dollars and 2 hours, how would you make as much money as possible?

#77

Post by nkurz » Fri, Oct 30, 2009, 6:41 PM UTC

thenduks wrote: post #50

nkurz wrote: post #46

Earlier quoted context omitted.

She teaches a class at Stanford and offers each team $5 of 'funding' in an envelope. She tells them that once they open the envelope, they have 2 hours to make as much money as they can. She cites three teams' approaches: 1) First team opens a free stand that offers to check peoples bike tire pressure for free, then charges $1 to inflate if necessary. This team changes midstream to accepting donations instead of char…

Thanks for the synopsis. I'm curious, though, what makes the solutions 'immoral' or dishonest? They seem perfectly legitimate to me.

There are two levels --- the first is within the context of a class assignment, and the second is as a business operation.

1) The bike tire pressure check isn't bad, but seems to be cheating on the class solution by using outside materials. Once one can 'presume' a pressure gauge and a pump, why not presume further specialized equipment or further outside funding? As a business proposition I was happy with it when they were charging a set price, but I personally feel uneasy with the change to donations. This isn't clear cut, but it's guilt based and I wouldn't do it myself despite the effectiveness. Compare with the Hare Krishna technique of forcing free flowers and then asking for a donation: http://www.garyasanchez.com/what-hare-krishnas-can-teach-us-...

2) Selling restaurant reservations is probably fine within the context of the class, but is a violation of the expectations of the restaurant. If everyone were to follow their approach, the system would collapse and the restaurant would need to implement a policy of cancellation charges. My simple view would be that if the restaurant would change their system if you told them what you plan to do, it is immoral.

3) From the point of view of the class, the winning solution feels like a cheap trick. Yes, it makes money, but not under the rules that were officially given. From a business point of view, it takes advantage of a captive audience. What's really being sold is the time of a third party who does not benefit from the transaction, and yet due to social constraints is unable to leave. This strikes me as both immoral and dishonest.

I fear that my scruples here aren't entirely consistent, and I'm pretty certain that they reduce my ability to make easy money. But I enjoy being in a situation where I can make decisions based on the answer to "Would the world be a better place if everyone followed this advice?". And for me, on this criteria, the last two solutions fail, and the first is on the edge once the donation approach is taken.

Re: If you had 5 dollars and 2 hours, how would you make as much money as possible?

#78

Post by araneae » Fri, Oct 30, 2009, 6:42 PM UTC

Prostitution.

Re: If you had 5 dollars and 2 hours, how would you make as much money as possible?

#79

Post by ianferrel » Fri, Oct 30, 2009, 6:42 PM UTC

jhancock wrote: post #52

nkurz wrote: post #46

Earlier quoted context omitted.

She teaches a class at Stanford and offers each team $5 of 'funding' in an envelope. She tells them that once they open the envelope, they have 2 hours to make as much money as they can. She cites three teams' approaches: 1) First team opens a free stand that offers to check peoples bike tire pressure for free, then charges $1 to inflate if necessary. This team changes midstream to accepting donations instead of char…

thanks. I would have failed the "winning" team. From my perspective, they made nothing from their two hours. The money was made by the 3 minutes in class which was not part of their 2 hour earning time.

As long as they either don't open the envelope until just before the presentation, I'm pretty sure they fit within the rules of the competition.

Re: If you had 5 dollars and 2 hours, how would you make as much money as possible?

#80

Post by seldo » Fri, Oct 30, 2009, 6:46 PM UTC

mechanical_fish wrote: post #74

seldo wrote: post #51

Earlier quoted context omitted.

See, the problem here is that she hands out two artificial constraints, and then praises the teams who ignore the constraints. 1. Used a device to measure the tire pressure and materials to build the booth and signs. Did they cost less than $5? Maybe. Did it take less than 2 hours to create the booth, the signs, and perform the services? Unlikely. 2. Well done on finding something you can acquire for free and then se…

Your argument seems to lean a bit too strongly on unsupported accusations of fraud: Did it take less than 2 hours to create the booth, the signs, and perform the services? Unlikely. What, you're saying that a team of college students, on a college campus , which presumably has a fully stocked stationery store within five minutes' walk, can't throw up some hand-scrawled signs in less than (say) 15 minutes for under fi…

You make valid points. My problem is less the specifics of the individual teams' solutions -- I don't dispute they were very clever and creative solutions -- but rather the impression that the greatest reward went to those who went furthest outside of the rules.

Team 1 were arguably entirely within the rules and made $200, Team 2 went a little outside (unless they were handed the envelope at 6pm) and made a little more, Team 3 ignored the 2-hour stipulation entirely and made $650.

Fundamentally, you're not rewarding creativity at money-making, you're rewarding creativity at rule-breaking.