1/ I was thinking through an interesting startup problem this past week, and I was reminded of a student I once had when I ran a student-led course in college on stock investing. She shocked the hell out of me by thinking outside the box and pulling a "Kobayashi Maru."
2/ To set some context, Kobayashi Maru is a training exercise designed to test new academy students in Star Trek (I admittedly don't watch the show but learned about this test from watching the theater film).
3/ To simplify, a student in the exercise is presented with two options:
A) Cross a neutral zone to rescue civilian passengers aboard the Kobayashi Maru ship and cause a war.
B) Leave them to die.
A) Cross a neutral zone to rescue civilian passengers aboard the Kobayashi Maru ship and cause a war.
B) Leave them to die.
4/ If the student attempts a rescue, the simulation guarantees they are attacked and never escape or survive.
If they abandon the civilians, the civilians die.
It's meant to be a no-win scenario. The simulation is meant to test one's character.
If they abandon the civilians, the civilians die.
It's meant to be a no-win scenario. The simulation is meant to test one's character.
5/ James T. Kirk, a major character in the show, takes the test 3 times and quickly realizes it's impossible to beat.
So before his 3rd attempt, he secretly reprograms the simulator so that he can rescue the civilians successfully.
So before his 3rd attempt, he secretly reprograms the simulator so that he can rescue the civilians successfully.
6/ Instead of addressing the problem head on, he redefines the problem entirely.
He's awarded a commendation for "original thinking."
When he's accused of cheating and "never having faced the no-win scenario," he replies that he does not believe in it.
He's awarded a commendation for "original thinking."
When he's accused of cheating and "never having faced the no-win scenario," he replies that he does not believe in it.
7/ Back to my stock class - through the semester, I always put all my students through an online stock simulator.
Everyone starts with the same amount of capital, and is allowed to make as many trades as they want per week. The strategy is up to them.
Everyone starts with the same amount of capital, and is allowed to make as many trades as they want per week. The strategy is up to them.
8/ There is a class-wide leaderboard where everyone can see capital gains. Some choose to buy and hold from the beginning until the end of the semester while others trade frequently.
Everyone must discuss their trades (gains or losses) so everyone can learn from one another.
Everyone must discuss their trades (gains or losses) so everyone can learn from one another.
9/ On the 2nd to last class, I see one student who is ranked 2nd or 3rd on the leaderboard. She's incredibly bright, friendly / well-liked, and competitive and I love her contributions in the class.
At the end of class, I can see her mind turning on ways she can rank first.
At the end of class, I can see her mind turning on ways she can rank first.
10/ The next week, the class is almost ending and I pull up the leaderboard for one final reveal.
And as the leaderboard comes up on the projector, the entire class lets out a huge collective gasp. I turn around to look at the screen and I'm dumbfounded.
And as the leaderboard comes up on the projector, the entire class lets out a huge collective gasp. I turn around to look at the screen and I'm dumbfounded.
11/ This bright student is not only rank #1, but her portfolio is worth something like 20x more than the 2nd rank.
I ask her to explain to the class what trades she made in the past week that could have possibly jumped her portfolio value this much.
I ask her to explain to the class what trades she made in the past week that could have possibly jumped her portfolio value this much.
12/ Sheepishly, she explains that in the past week, she was obsessive about placing #1. While she was placing trades in the online simulator, she came to the realization that the simulator had a 1 minute delay in updating stock prices relative to the real market.
13/ So she found a friend in the computer science department, who built her a little tool that would analyze stocks that had the largest price jumps every single minute.
Using that tool, she placed hundreds of buy/sell trades in the past week to skyrocket her portfolio value.
Using that tool, she placed hundreds of buy/sell trades in the past week to skyrocket her portfolio value.
14/ Everyone in the class laughed. Keep in mind she was already a bright student who knew her fundamentals. Of course what she pulled wasn't "fair," but I was impressed.
Our stock simulation wasn't a no-win scenario but she pulled a "Kobayashi Maru" and beat the system.
Our stock simulation wasn't a no-win scenario but she pulled a "Kobayashi Maru" and beat the system.
15/ Years later, she sends me an e-mail asking if I'd be open to providing a reference for a hedge fund she's interviewing with.
Over the phone, I tell the portfolio manager the story of what she pulled. He was similarly speechless and she ended up getting the job.
Over the phone, I tell the portfolio manager the story of what she pulled. He was similarly speechless and she ended up getting the job.
16/ In our startup journey so far, I can count a number of scenarios on my hand that truly felt like a Kobayashi Maru test.
And every time I'm overwhelmed, I think of James T. Kirk and this student.
And every time I'm overwhelmed, I think of James T. Kirk and this student.
17/ There are typically creative solutions to every problem. EMPHASIS ON INTEGRITY & HONESTY FIRST ALWAYS. THIS IS AN UNSPOKEN NON-NEGOTIABLE.
Sometimes you just have to re-frame the problem entirely.
Sometimes you just have to re-frame the problem entirely.
