{"id":973,"date":"2026-05-15T19:29:32","date_gmt":"2026-05-15T19:29:32","guid":{"rendered":"https:\/\/pressbooks.ulib.csuohio.edu\/business-essentials-for-future-professionals\/?post_type=part&#038;p=973"},"modified":"2026-08-17T21:03:34","modified_gmt":"2026-08-17T21:03:34","slug":"1-5b","status":"publish","type":"part","link":"https:\/\/pressbooks.ulib.csuohio.edu\/business-essentials-for-future-professionals\/part\/1-5b\/","title":{"rendered":"1 The $5 Stanford Experiment"},"content":{"raw":"<h2 data-start=\"0\" data-end=\"204\"><a href=\"https:\/\/youtu.be\/oG7drGdBfNk?si=Th2oU38I8NffsfaU\">The \u201c$5 Stanford Experiment\u201d\u00a0<\/a><\/h2>\r\n<div class=\"textbox\">\r\n<h3 data-section-id=\"6xln98\" data-start=\"206\" data-end=\"223\">The Challenge<\/h3>\r\n<p data-start=\"224\" data-end=\"254\">Student teams were each given:<\/p>\r\n\r\n<ul data-start=\"255\" data-end=\"382\">\r\n \t<li data-section-id=\"1me25x5\" data-start=\"255\" data-end=\"277\">$5 in seed money<\/li>\r\n \t<li data-section-id=\"17c0bgu\" data-start=\"278\" data-end=\"325\">2 hours to make as much money as possible<\/li>\r\n \t<li data-section-id=\"1abl6sb\" data-start=\"326\" data-end=\"382\">A short presentation afterward about what they learned<\/li>\r\n<\/ul>\r\n<\/div>\r\n<p data-start=\"384\" data-end=\"426\">At first, most students thought literally:<\/p>\r\n\r\n<ul data-start=\"427\" data-end=\"518\">\r\n \t<li data-section-id=\"1l4mz8o\" data-start=\"427\" data-end=\"462\">Buy ingredients and sell lemonade<\/li>\r\n \t<li data-section-id=\"1cb031i\" data-start=\"463\" data-end=\"474\">Wash cars<\/li>\r\n \t<li data-section-id=\"19mvng\" data-start=\"475\" data-end=\"496\">Buy lottery tickets<\/li>\r\n \t<li data-section-id=\"1fiq6hl\" data-start=\"497\" data-end=\"518\">Sell small products<\/li>\r\n<\/ul>\r\n<p data-start=\"520\" data-end=\"590\">But the teams that made the <em data-start=\"548\" data-end=\"554\">most<\/em> money realized something important:<\/p>\r\n\r\n<blockquote data-start=\"592\" data-end=\"623\">\r\n<p data-start=\"594\" data-end=\"623\"><span class=\"pullquote-left\">The $5 was almost irrelevant.<\/span><\/p>\r\n<\/blockquote>\r\n<h3 data-section-id=\"ybkszv\" data-start=\"625\" data-end=\"663\"><\/h3>\r\n<h3 data-section-id=\"ybkszv\" data-start=\"625\" data-end=\"663\"><\/h3>\r\n<h3 data-section-id=\"ybkszv\" data-start=\"625\" data-end=\"663\"><\/h3>\r\n<h3>What the Most Successful Teams Did<\/h3>\r\n<p data-start=\"664\" data-end=\"701\">The best-performing teams focused on:<\/p>\r\n\r\n<ul data-start=\"702\" data-end=\"801\">\r\n \t<li data-section-id=\"1vwbnzg\" data-start=\"702\" data-end=\"728\">Identifying unmet demand<\/li>\r\n \t<li data-section-id=\"2euzc6\" data-start=\"729\" data-end=\"765\">Using creativity and social skills<\/li>\r\n \t<li data-section-id=\"313fj\" data-start=\"766\" data-end=\"801\">Leveraging attention and scarcity<\/li>\r\n<\/ul>\r\n<p data-start=\"803\" data-end=\"821\">Examples included:<\/p>\r\n\r\n<h4 data-start=\"823\" data-end=\"858\">1. Restaurant Reservation Team<\/h4>\r\n<p data-start=\"859\" data-end=\"1079\">One group noticed long waits at popular restaurants in <span class=\"hover:entity-accent entity-underline inline cursor-pointer align-baseline\"><span class=\"whitespace-normal\">Palo Alto, California.\u00a0<\/span><\/span><br data-start=\"952\" data-end=\"955\" \/>They made restaurant reservations in advance, then sold those reservation slots to hungry customers who didn\u2019t want to wait.<\/p>\r\n\r\n<h4 data-start=\"1081\" data-end=\"1116\">2. Bicycle Tire Inflation Team<\/h4>\r\n<p data-start=\"1117\" data-end=\"1237\">Another team set up a bike tire inflation station near campus where cyclists frequently had flat or underinflated tires.<\/p>\r\n\r\n<h4 data-start=\"1239\" data-end=\"1271\">3. The Highest-Earning Team<\/h4>\r\n<p data-start=\"1272\" data-end=\"1372\">The team that earned the most money reportedly realized the real value wasn\u2019t the $5 or the 2 hours\u2026<\/p>\r\n<p data-start=\"1374\" data-end=\"1427\">It was the <strong data-start=\"1385\" data-end=\"1426\">3-minute class presentation afterward<\/strong>.<\/p>\r\n<p data-start=\"1429\" data-end=\"1634\">So instead of focusing on earning cash during the challenge, they sold their presentation time to a company that wanted to recruit Stanford students. That company paid hundreds of dollars for the exposure.<\/p>\r\n\r\n<h3 data-section-id=\"997tv9\" data-start=\"1636\" data-end=\"1651\"><\/h3>\r\n<div class=\"textbox textbox--key-takeaways\"><header class=\"textbox__header\">\r\n<p class=\"textbox__title\">Key Takeaway<\/p>\r\n\r\n<\/header>\r\n<div class=\"textbox__content\">\r\n<p data-start=\"1849\" data-end=\"1896\">The students who succeeded best stopped asking:<\/p>\r\n\r\n<blockquote data-start=\"1897\" data-end=\"1918\">\r\n<p data-start=\"1899\" data-end=\"1918\">\u201cHow do we use $5?\u201d<\/p>\r\n<\/blockquote>\r\n<p data-start=\"1920\" data-end=\"1940\">\u2026and started asking:<\/p>\r\n\r\n<blockquote data-start=\"1941\" data-end=\"1982\">\r\n<p data-start=\"1943\" data-end=\"1982\">\u201cWhat resources do we <em data-start=\"1965\" data-end=\"1975\">actually<\/em> have?\u201d<\/p>\r\n<\/blockquote>\r\n<p data-start=\"1984\" data-end=\"2009\">Those resources included:<\/p>\r\n\r\n<ul data-start=\"2010\" data-end=\"2099\">\r\n \t<li data-section-id=\"1eqwjtg\" data-start=\"2010\" data-end=\"2025\">Their network<\/li>\r\n \t<li data-section-id=\"jypspr\" data-start=\"2026\" data-end=\"2038\">Their time<\/li>\r\n \t<li data-section-id=\"1g1nrw7\" data-start=\"2039\" data-end=\"2055\">Their location<\/li>\r\n \t<li data-section-id=\"1xr7enc\" data-start=\"2056\" data-end=\"2070\">Their skills<\/li>\r\n \t<li data-section-id=\"1q0l9tu\" data-start=\"2071\" data-end=\"2099\">Their audience\u2019s attention<\/li>\r\n<\/ul>\r\n<\/div>\r\n<\/div>\r\n<h3 data-section-id=\"1f9f2vj\" data-start=\"2101\" data-end=\"2135\"><\/h3>\r\n<h3 data-section-id=\"1f9f2vj\" data-start=\"2101\" data-end=\"2135\">Why People Still Talk About It<\/h3>\r\n<p data-start=\"2136\" data-end=\"2257\">The experiment became popular in business schools, startup culture, and leadership training because it demonstrates that:<\/p>\r\n\r\n<ul data-start=\"2258\" data-end=\"2421\">\r\n \t<li data-section-id=\"1895ehu\" data-start=\"2258\" data-end=\"2315\">Big opportunities often come from reframing the problem<\/li>\r\n \t<li data-section-id=\"pr6ncy\" data-start=\"2316\" data-end=\"2360\">Initial resources matter less than mindset<\/li>\r\n \t<li data-section-id=\"11ff4pi\" data-start=\"2361\" data-end=\"2421\">Attention and distribution can be more valuable than money<\/li>\r\n<\/ul>\r\n<p data-start=\"2423\" data-end=\"2524\" data-is-last-node=\"\" data-is-only-node=\"\"><\/p>","rendered":"<h2 data-start=\"0\" data-end=\"204\"><a href=\"https:\/\/youtu.be\/oG7drGdBfNk?si=Th2oU38I8NffsfaU\">The \u201c$5 Stanford Experiment\u201d\u00a0<\/a><\/h2>\n<div class=\"textbox\">\n<h3 data-section-id=\"6xln98\" data-start=\"206\" data-end=\"223\">The Challenge<\/h3>\n<p data-start=\"224\" data-end=\"254\">Student teams were each given:<\/p>\n<ul data-start=\"255\" data-end=\"382\">\n<li data-section-id=\"1me25x5\" data-start=\"255\" data-end=\"277\">$5 in seed money<\/li>\n<li data-section-id=\"17c0bgu\" data-start=\"278\" data-end=\"325\">2 hours to make as much money as possible<\/li>\n<li data-section-id=\"1abl6sb\" data-start=\"326\" data-end=\"382\">A short presentation afterward about what they learned<\/li>\n<\/ul>\n<\/div>\n<p data-start=\"384\" data-end=\"426\">At first, most students thought literally:<\/p>\n<ul data-start=\"427\" data-end=\"518\">\n<li data-section-id=\"1l4mz8o\" data-start=\"427\" data-end=\"462\">Buy ingredients and sell lemonade<\/li>\n<li data-section-id=\"1cb031i\" data-start=\"463\" data-end=\"474\">Wash cars<\/li>\n<li data-section-id=\"19mvng\" data-start=\"475\" data-end=\"496\">Buy lottery tickets<\/li>\n<li data-section-id=\"1fiq6hl\" data-start=\"497\" data-end=\"518\">Sell small products<\/li>\n<\/ul>\n<p data-start=\"520\" data-end=\"590\">But the teams that made the <em data-start=\"548\" data-end=\"554\">most<\/em> money realized something important:<\/p>\n<blockquote data-start=\"592\" data-end=\"623\">\n<p data-start=\"594\" data-end=\"623\"><span class=\"pullquote-left\">The $5 was almost irrelevant.<\/span><\/p>\n<\/blockquote>\n<h3 data-section-id=\"ybkszv\" data-start=\"625\" data-end=\"663\"><\/h3>\n<h3 data-section-id=\"ybkszv\" data-start=\"625\" data-end=\"663\"><\/h3>\n<h3 data-section-id=\"ybkszv\" data-start=\"625\" data-end=\"663\"><\/h3>\n<h3>What the Most Successful Teams Did<\/h3>\n<p data-start=\"664\" data-end=\"701\">The best-performing teams focused on:<\/p>\n<ul data-start=\"702\" data-end=\"801\">\n<li data-section-id=\"1vwbnzg\" data-start=\"702\" data-end=\"728\">Identifying unmet demand<\/li>\n<li data-section-id=\"2euzc6\" data-start=\"729\" data-end=\"765\">Using creativity and social skills<\/li>\n<li data-section-id=\"313fj\" data-start=\"766\" data-end=\"801\">Leveraging attention and scarcity<\/li>\n<\/ul>\n<p data-start=\"803\" data-end=\"821\">Examples included:<\/p>\n<h4 data-start=\"823\" data-end=\"858\">1. Restaurant Reservation Team<\/h4>\n<p data-start=\"859\" data-end=\"1079\">One group noticed long waits at popular restaurants in <span class=\"hover:entity-accent entity-underline inline cursor-pointer align-baseline\"><span class=\"whitespace-normal\">Palo Alto, California.\u00a0<\/span><\/span><br data-start=\"952\" data-end=\"955\" \/>They made restaurant reservations in advance, then sold those reservation slots to hungry customers who didn\u2019t want to wait.<\/p>\n<h4 data-start=\"1081\" data-end=\"1116\">2. Bicycle Tire Inflation Team<\/h4>\n<p data-start=\"1117\" data-end=\"1237\">Another team set up a bike tire inflation station near campus where cyclists frequently had flat or underinflated tires.<\/p>\n<h4 data-start=\"1239\" data-end=\"1271\">3. The Highest-Earning Team<\/h4>\n<p data-start=\"1272\" data-end=\"1372\">The team that earned the most money reportedly realized the real value wasn\u2019t the $5 or the 2 hours\u2026<\/p>\n<p data-start=\"1374\" data-end=\"1427\">It was the <strong data-start=\"1385\" data-end=\"1426\">3-minute class presentation afterward<\/strong>.<\/p>\n<p data-start=\"1429\" data-end=\"1634\">So instead of focusing on earning cash during the challenge, they sold their presentation time to a company that wanted to recruit Stanford students. That company paid hundreds of dollars for the exposure.<\/p>\n<h3 data-section-id=\"997tv9\" data-start=\"1636\" data-end=\"1651\"><\/h3>\n<div class=\"textbox textbox--key-takeaways\">\n<header class=\"textbox__header\">\n<p class=\"textbox__title\">Key Takeaway<\/p>\n<\/header>\n<div class=\"textbox__content\">\n<p data-start=\"1849\" data-end=\"1896\">The students who succeeded best stopped asking:<\/p>\n<blockquote data-start=\"1897\" data-end=\"1918\">\n<p data-start=\"1899\" data-end=\"1918\">\u201cHow do we use $5?\u201d<\/p>\n<\/blockquote>\n<p data-start=\"1920\" data-end=\"1940\">\u2026and started asking:<\/p>\n<blockquote data-start=\"1941\" data-end=\"1982\">\n<p data-start=\"1943\" data-end=\"1982\">\u201cWhat resources do we <em data-start=\"1965\" data-end=\"1975\">actually<\/em> have?\u201d<\/p>\n<\/blockquote>\n<p data-start=\"1984\" data-end=\"2009\">Those resources included:<\/p>\n<ul data-start=\"2010\" data-end=\"2099\">\n<li data-section-id=\"1eqwjtg\" data-start=\"2010\" data-end=\"2025\">Their network<\/li>\n<li data-section-id=\"jypspr\" data-start=\"2026\" data-end=\"2038\">Their time<\/li>\n<li data-section-id=\"1g1nrw7\" data-start=\"2039\" data-end=\"2055\">Their location<\/li>\n<li data-section-id=\"1xr7enc\" data-start=\"2056\" data-end=\"2070\">Their skills<\/li>\n<li data-section-id=\"1q0l9tu\" data-start=\"2071\" data-end=\"2099\">Their audience\u2019s attention<\/li>\n<\/ul>\n<\/div>\n<\/div>\n<h3 data-section-id=\"1f9f2vj\" data-start=\"2101\" data-end=\"2135\"><\/h3>\n<h3 data-section-id=\"1f9f2vj\" data-start=\"2101\" data-end=\"2135\">Why People Still Talk About It<\/h3>\n<p data-start=\"2136\" data-end=\"2257\">The experiment became popular in business schools, startup culture, and leadership training because it demonstrates that:<\/p>\n<ul data-start=\"2258\" data-end=\"2421\">\n<li data-section-id=\"1895ehu\" data-start=\"2258\" data-end=\"2315\">Big opportunities often come from reframing the problem<\/li>\n<li data-section-id=\"pr6ncy\" data-start=\"2316\" data-end=\"2360\">Initial resources matter less than mindset<\/li>\n<li data-section-id=\"11ff4pi\" data-start=\"2361\" data-end=\"2421\">Attention and distribution can be more valuable than money<\/li>\n<\/ul>\n<p data-start=\"2423\" data-end=\"2524\" data-is-last-node=\"\" data-is-only-node=\"\">\n","protected":false},"parent":0,"menu_order":28,"template":"","meta":{"pb_part_invisible":null},"contributor":[],"license":[],"class_list":["post-973","part","type-part","status-publish","hentry"],"_links":{"self":[{"href":"https:\/\/pressbooks.ulib.csuohio.edu\/business-essentials-for-future-professionals\/wp-json\/pressbooks\/v2\/parts\/973","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/pressbooks.ulib.csuohio.edu\/business-essentials-for-future-professionals\/wp-json\/pressbooks\/v2\/parts"}],"about":[{"href":"https:\/\/pressbooks.ulib.csuohio.edu\/business-essentials-for-future-professionals\/wp-json\/wp\/v2\/types\/part"}],"version-history":[{"count":3,"href":"https:\/\/pressbooks.ulib.csuohio.edu\/business-essentials-for-future-professionals\/wp-json\/pressbooks\/v2\/parts\/973\/revisions"}],"predecessor-version":[{"id":1163,"href":"https:\/\/pressbooks.ulib.csuohio.edu\/business-essentials-for-future-professionals\/wp-json\/pressbooks\/v2\/parts\/973\/revisions\/1163"}],"wp:attachment":[{"href":"https:\/\/pressbooks.ulib.csuohio.edu\/business-essentials-for-future-professionals\/wp-json\/wp\/v2\/media?parent=973"}],"wp:term":[{"taxonomy":"contributor","embeddable":true,"href":"https:\/\/pressbooks.ulib.csuohio.edu\/business-essentials-for-future-professionals\/wp-json\/wp\/v2\/contributor?post=973"},{"taxonomy":"license","embeddable":true,"href":"https:\/\/pressbooks.ulib.csuohio.edu\/business-essentials-for-future-professionals\/wp-json\/wp\/v2\/license?post=973"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}