Since I’m an entrepreneur, many well-wishers often send me links to articles people have written about entrepreneurship. Usually, this is about as valuable as sending a bird a book about bird-watching. There is, however, one video that I would recommend everyone should watch. The presenter is a woman in Stanford called Tina Seelig (who, among other things, was at one point of time on Rap’s advisory board in Embrace).
Here’s a link:
Tina Seelig is teaching a course on entrepreneurship, and for an assignment, she hands out envelopes to groups of students containing “seed money”. The groups have 4-5 days to come up with a business plan and preparations, but as soon as they open the envelope, they have 2 hours to make the most amount of money they can from the seed money. And the amount of money in the envelope is $5.
Now for this story to make any impact on you, you have to do this exercise: step away from this post and think for a couple of minutes what you would do: how would you make the most amount of money from $5 in 2 hours?
I remember thinking to myself, $5? what the hell can you invest in that costs $5? Maybe you can buy and resell food. Maybe you can pay for a rickshaw or a taxi and try some kind of ride-sharing. Or just buy a lottery ticket.
If you started working on the problem by asking the question that I did – what can you do with $5? – you have failed the test already. Because the winning students from Tina’s class didn’t even use the money. One group of kids went to restaurants in Palo Alto on a Saturday evening and got reservations in the best ones, which they sold to people who didn’t have a reservation but wanted a seat quickly. The #1 team didn’t even do that: they sold their 3-minute presentation slot in the class to a company looking to hire Stanford design students.
My first reaction after these ideas were revealed to me was, ‘That’s cheating!’. Somehow, I felt, not even using the $5 meant the rules had been bent, if not somehow broken.
Tina didn’t end the story with a moral, but after a few moments of thinking, an epiphany revealed the moral to me anyway.
Because I remembered myself, freshly returned to India in 2007, with an incredible bunch of people who had decided to cast in their lot with me and sail the entrepreneurship boat. We had decided we wanted to start a company but didn’t know what the company would do. And the question we kept asking ourselves was, “What is the most profitable thing that a mechanical engineer, an electrical engineer, an operations expert and an MBA can do?”
If only I had seen the Seelig lecture before. I would have known how that question was absolutely, completely the wrong question to ask.
I remember in those early days of being my own boss, someone suggested to me that we could get our company off the ground by reselling another company’s software and providing solutions around it. This raised the hackles in me: “I’m an inventor! How does becoming a reseller leverage my strengths as an inventor?” That’s like Tina’s students asking themselves, “Reservations! How does that use up the 5 bucks she gave us?”
Definitions confuse and complicate. If Tina had posed her question without concretizing the $5, it would have stimulated my creativity; if she had said, “How can you make the most money using no money or a very small amount of money?”, I too may have hit upon a great idea like her winning students. Putting the $5 number in the question, and, worse for the students, putting a $5 note in their hands, focuses their creative energies on the wrong thing: the amount of money they had, instead of the right thing: the amount of money they had to make.
I believe, with a zealot’s enthusiasm, that Entrepreneurship is a metaphor for Life. As with the $5, so with life; we ask ourselves, “Given my education / my family / my current job / my bank balance, what will give me the most happiness?” This is the Fallacy of the Given. Because a better question is, “What will give me the most happiness – given nothing?”
And that question may turn out to have the best answer of all.
 Coined from the expression in probability, B given A.