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Steve Ballmer reveals the interview test Microsoft used to separate problem-solvers from gamblers: "I'm thinking of a number between 1 and 100. First guess, I give you $5. Then $4, $3, $2, $1. After that, you pay me." "There are far more numbers on which you lose than win."

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Steve Ballmer has a 30-second test that separates good operators from great ones: The former Microsoft CEO uses a simple game in interviews. He's thinking of a number between 1 and 100, and you have to guess it. "I'm thinking of a number between 1 and 100. You can guess. After each guess, I'll tell you whether high or low." Then he lays out the economics. Your first guess pays five dollars, then four, three, two, one, zero. And after that the cash flow reverses and you start paying him: a buck, then two, then three. Every additional move destroys value. "And the question is, do you want to play or not?" When the interviewer jumps straight in to play, Ballmer stops him: "I'm not trying to get you to do it on camera. It's actually quite a hard problem." They run it anyway. The interviewer guesses 50 (too low), 75 (too high), and zeroes in on the number in seven guesses. The outcome? "You owe me a buck." The point was never the guessing. It was the decision before the guessing. Ballmer's read on the interviewer: "I learned that... you need to step back... and really ask whether you should expect to win or lose money on this thing." Run the numbers and the deal is bad: "There are far more numbers on which you lose than numbers on which you win even with your strategy. And number two, I can pick numbers specifically that are hard for you to get." That's the whole lesson in a sentence. The losing outcomes outnumber the winning ones, and the counterparty controls the setup. No amount of in-the-moment cleverness fixes a negative-expected-value bet. The right move is to decline it. Ballmer still remembers the one candidate who saw it instantly. An interview at Purdue: "He said, 'Well, here's the answer.' Wrote it down and said, 'This is the expected value of the game.'" He didn't play. He priced it.

Steve Ballmer has a 30-second test that separates good operators from great ones: The former Microsoft CEO uses a simple game in interviews. He's thinking of a number between 1 and 100, and you have to guess it. "I'm thinking of a number between 1 and 100. You can guess. After each guess, I'll tell you whether high or low." Then he lays out the economics. Your first guess pays five dollars, then four, three, two, one, zero. And after that the cash flow reverses and you start paying him: a buck, then two, then three. Every additional move destroys value. "And the question is, do you want to play or not?" When the interviewer jumps straight in to play, Ballmer stops him: "I'm not trying to get you to do it on camera. It's actually quite a hard problem." They run it anyway. The interviewer guesses 50 (too low), 75 (too high), and zeroes in on the number in seven guesses. The outcome? "You owe me a buck." The point was never the guessing. It was the decision before the guessing. Ballmer's read on the interviewer: "I learned that... you need to step back... and really ask whether you should expect to win or lose money on this thing." Run the numbers and the deal is bad: "There are far more numbers on which you lose than numbers on which you win even with your strategy. And number two, I can pick numbers specifically that are hard for you to get." That's the whole lesson in a sentence. The losing outcomes outnumber the winning ones, and the counterparty controls the setup. No amount of in-the-moment cleverness fixes a negative-expected-value bet. The right move is to decline it. Ballmer still remembers the one candidate who saw it instantly. An interview at Purdue: "He said, 'Well, here's the answer.' Wrote it down and said, 'This is the expected value of the game.'" He didn't play. He priced it.

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