The word “value” took on a whole new meaning for Chicago Booth students in a new course taught by the cofounders of the multi-billion dollar coupon website, Groupon. When Eric Lefkofsky and Brad Keywell, who cofounded Groupon in 2008, challenged their 95 students to “create value” from a toy costing no more than $5 during a two-week midterm assignment, that could have meant driving traffic toward the toy or making money by reselling the thing for, say, $10, doubling the value.
Instead, more than two-thirds of the students translated “create value” into donate to charity. “I wasn’t surprised,” said Lefkofsky. “The goal was to take an item that’s worth very little money and turn it into as much value as you can. One way to get people over paying or assigning a higher value to something is to attach it to a noble cause.”
That idea was harder than it seemed for Amit Koren and his three teammates Alex Leichtman, Laura Shapland, and Kurt Ericson—all second-year students in the Full-Time MBA Program. Shapland happened to be a board member at Horizons for Youth, a nonprofit educational organization for low-income Chicago children. The organization’s summer school program was preparing to shut down, despite helping 100 percent of its students finish high school and getting 80 percent of them into college.
“We figured that if we tried to raise money for a cause we believed in, then even if we only did $50, we’ve done something good,” said Koren, who landed an internship at Groupon last summer and became a full-time staff member by fall.
The team pooled their $5 toy allowance together to buy a Lego set. They then used those Legos to design a school, symbolizing their cause and featured it in an inspirational YouTube video. Their first five attempts to create value failed: Car dealerships refused to donate vehicles, banks didn’t want to donate foreclosed property, and homeowners said no to donating a vacation stay. They even had group member Kurt Ericson shovel snow for eight hours, but that only brought in an extra $16—enough for a better Lego set.
The group’s persistence led them to another strategy—engaging business leaders, starting Koren’s colleagues at Groupon. Koren convinced Groupon cofounder and CEO, Andrew Mason, also a former student of the University of Chicago Harris School of Public Policy Studies, to match donations from Groupon employees up to $10,000.
When the team sent blast emails to employees, Koren watched in amazement and humility as the generosity poured in. Five minutes after hitting send, more than 40 people pledged a donation, which would be drafted directly from their paychecks. With the midterm deadline approaching, Groupon employees had donated $10,433. The team then took the project to other business leaders for an additional matching donation. One said yes.
The team’s $5 Lego sculpture yielded $30,433 in donations, earning them the class’s first place prize for creating value.
“What attracted us to the winning group was what they experienced in the duration of the assignment. The first few ideas failed, and they ultimately had to pivot to find the right idea,” Lefkofsky said. The award was a meeting with a business leader of the team’s choice, courtesy of Lefkofsky and Keywell. “They had to find some creativity.”
Another group’s one-week toy drive for Children’s Memorial Hospital landed a press release on the American Consumer News website. Group members Avi Levine, David Ward, Daniel Shani, and Ashish Tolia started by using their $5 to purchase toys on the hospital’s patient wish list: a Hot Wheels car launcher, a Barbie doll, and Play-Doh. Then, the group dug into their personal and professional networks to see who else would donate money to purchase more toys on the wish list.
They created a Facebook group, sent blast emails, tweeted, and even got reality TV star Rob Kardashian to tweet about the campaign to his 1 million followers.
The team even tried to start a friendly competition with 20 peer MBA programs nationwide. The program that generated the most money for their local children’s hospital would win an introduction with the Groupon cofounders. The project’s extensive reach led to $1,300 for Children’s Memorial Hospital.
“But the visibility we created was much bigger than the people who were directly contributing,” noted group member Daniel Shani, a first-year student with a concentration in entrepreneurship and analytical management. The cumulative value of the impressions is estimated at $7,000.
“Entrepreneurship is about being resourceful, being flexible,” Shani added. “More than that, I learned that enthusiasm and passion can bring in power. We had no problem writing emails to CFOs and media outlets, picking up the phone to get information. In class they tell us it’s all about failure—quick failure. Test your ideas, scrap it, and keep moving.”