Why Is It So Difficult To Give Away $12,000?

Last week I announced I was giving away $12,000 to wannabe entrepreneurs. Rather than excitement, it was received with scepticism and hostility. I have called them entrepreneurship grants. 12 no-strings-attached easy-to-apply grants of $1,000 each.

I expected the post to be really popular. Like viral, shared everywhere popular. After all who wouldn’t want $1,000? But that’s not what happened. Some people loved it and sent in their applications, but most people treated the announcement with a big dollop of scepticism. Or just downright hostility.

Then I started to receive hate mail. I won’t post the worst stuff, but there was a lot along these lines:

WTF am I meant to do with $1,000?!

You’re just trying to get suckers to send their business plan to you. How do I know you aren’t trying to brain rape people and steal their ip?

I had made a fatal flaw with my grants.

I had made them too good.

If something sounds too good to be true, it probably is.

Someone is giving away $12,000? Rubbish. There must be some catch.

Scepticism is Healthy, Sometimes

Scepticism is healthy. It’s what stops us from falling for scams, or jumping out of plane because someone says we can fly. It is what stops us taking risks.

Scepticism is safe.

But it’s not always very useful, especially for entrepreneurs. Suspicion, cynicism and doubt keep us from taking advantage of excellent opportunities.

Optimists Finish First

Back when I was at university I started a business with a couple of friends called ‘Student Swag’. The aim was to teach students about matched betting. We went round the university and stuck up hundreds of flyers. It was really lame, a picture of some money and a sentence that went something like this.

Want to earn thousands of pounds while studying at university? Come to our free seminar to learn how to make money from gambling.

Terrible. And absolutely screams scam.

But a bunch of people did turn up to the seminar. They were sceptical (too good to be true?) but were willing to hear out the free seminar. And most of them went on to take our course on matched betting.

Why am I telling you this story? Well, I am still friends with and keep track of a lot of the people who turned up to that seminar and a lot of them have gone on to found very successful businesses in areas that are completely unrelated to gambling.

In fact, if I were to try and rank my university acquaintances by who is doing the best financially, I reckon 7 or 8 of the top 10 were in that room for that seminar. How crazy is that?

I think there is some sort link between successful entrepreneurship and the mindset of someone who sees a scammy-looking poster and says “well it could be true”. I challenge you to find an entrepreneur who isn’t a risk-taking optimist.

I’m not the biggest fan of Steve Jobs, but sometimes his quotes really hit the spot.

Stay Young, Stay Foolish

Balancing Scepticism And Optimism

But the world is full of scammers and stories of people who have lost everything to fraud or pyramid schemes. So how do you balance scepticism and optimism?

Now that is the difficult question.

Somehow you need to be simultaneously very sceptical, but also open minded. Analyse the opportunity logically. Look into the people providing it. Does their sales pitch make sense? Do they have a history of integrity? Is their free/easy to access content good? Do other resources back up their claims? What is their motivation?

I think that a lack of an obvious motivation was one of the problems with my grants. People couldn’t understand why on earth I would give away $12,000. What is possibly in it for me?

Of course there was a motivation. Extra publicity leads to more fans of the blog which leads to extra earnings for me. Like most entrepreneurial decisions it was a risk, will the extra publicity outweigh the investment?  (here’s how this blog makes money).

But I didn’t lay that out in my original post. Which left people to fabricate their own reasons.

Once you have learnt as much as you can about the opportunity, you need to calculate the risks. What is the worst outcome? What is the best? What are the chances of it working out? And then at some point, if the odds weigh up, you need to take a leap and go for it.

  • David Rivas

    I found this a very good read! To be honest I don’t know why people are so attached to their ideas when in reality if it is so easy to copy there will always be competition sooner or later. Therefore, If you establish your brand no matter what you will stay in business, alway innovating. When I saw the grant post I was very exited to apply and will do once I finish my video submission. It’s normal to have this kind of responses, the only thing you can do to prove people wrong is to continue with what you planned all along and I garante you people will see how you positively impacted upcoming entrepreneurs.

  • Martha Muniz

    ??? Totally disagree with people taking the time to read nasty replies to the contest. Simple, if you think it may be a scam, why even take the time to write a comment? Also, no a days who does not know that doing the give away has to also have a motivation? Case in point generating traffic to your site.
    Hope I had had the chanse to enter the giveaway! Anyway thank you for giving out the money, even if it is $1000, I take that any day. I can sure help pay a thing or two for a start up.

  • Niall

    Great post. I, like you, am completely a risk taker. I have recently taken the plunge into the entrepreneurial stream with http://www.gymgeardirect.com. I rarely place too much time on skepticism or skeptical people. Make edgy decisions, and learn from the mistakes without dwelling on them moving forward.

  • I completely agree that a sense of ‘positive naivety’ is a common trait i’ve amongst my more entrepreneurially inclined friends and colleagues; a willingness to believe in a positive outcome (as apposed to a negative one).

    I always find complaints like the ones you used as an example strange – if you think its a way to lure business plans, don’t send your business plan! You didn’t request business plans in the initial post. Annoyingly, is it seems people are more willing to voice negative opinions then positive ones.

  • “You want to steal business plans!” Wow, what a rookie thing to say.

  • James

    Incredible. I can’t believe that people interpreted your incredible offer with such negativity. On the contrary, I sat there for the rest of the day thinking that your decision to do the grant is absolute genius. The publicity that you should be getting for it should easily repay itself, so I thought it was very intelligent indeed!

    Regarding the people who believe “you’re after their ideas to steal them” that’s absolute insanity and obviously have no idea who you are. I hadn’t even considered that aspect as a possibility. Don’t they realise that you’ll be making content on your website with their cool new projects, they’ll get visibility online via your blog and their project would get a bigger boost than the $1000 represents. Madness. One can only assume those people who are feeling these sentiments are the type of people who will sit there holding onto their ideas and never acting, so they are angry that you tried to force them to take action.

    I hope you get some fantastic applications and your grant gives people the motivation they need to kick-start their new business success!