As a recent judge for Temple University’s ‘Be Your Own Boss’ business plan competition and having advised the winning team for Penn State’s IdeaPitch competition, I was afforded the perspective of seeing both ends of the typical higher education business plan contest. As a result, I’ve been thinking a lot about business plan competitions recently. In short, it’s very clear that judging a team’s ability to put together a business plan versus creating a sustainable business are two very distinct things.
Vivek Wadhwa has some very interesting commentary on the subject on TechCrunch from November.
First, the good — most of these competitions are run under the auspices of helping to inspire entrepreneurship. Wadhwa says “This is not to say [I think] the contests are bad. [T]hey educate students in entrepreneurship and motivate them to come up with interesting ideas.” Also, here’s a quote from the MIT $100K’s site: “The MIT $100K Entrepreneurship Competition is a year-long educational experience designed to encourage students and researchers in the MIT community to act on their talent, ideas and energy to produce tomorrow’s leading firms.” For sure, motivating students to explore entrepreneurship is a good thing (and one that I put a lot of effort into!!).
However, I think that if you’re going to do something, you should do it in the most effective way possible, especially with the resources, publicity, and sponsorship dollars at play here. But, instead, business plan competitions are tired, old and out-of-date. And, for an excellent pairing, you have, of course, the criticism that the results are rather dubious…
Instead, this NY Times blog post gets to what I think the real root cause of the issues with most competitions: “…Kirstie Chadwick, a tech entrepreneur and director of the University of Central Florida’s Venture Lab, fears that the myriad business plan competitions and related events cropping up around the world are less about helping start-ups and more about schools and other competition organizers ‘keeping up with the Joneses.’” Indeed – the huge prizes that are awarded make for great PR, not just for the teams that participate, but for the schools. (“Look {insert name of prospective student here}! See how much money School X is giving to these entrepreneurs?! This is certainly the right place for you to learn that trendy thing called entrepreneurship!”)
But setting that aside – if a school really wanted to create some buzz, what about launching an initiative that actually helped students become better entrepreneurs, rather than just write good business plans?
The seed-stage startup accelerator model seems to work. Just look at the TechStars results. Y Combinator and other results are here (click through the tabs).
Instead of giving a huge chunk of money to the one winning team, what about setting up a university-wide program to funnel teams with ideas into an accelerator-style program? Give each qualified team a little bit of funding for the semester and have them go out and prove their idea is feasible. But don’t just drop them off into the deep end – connect them with the mentors and resources that they need to be able to do this successfully (I bet you that most don’t know where to turn with their ideas). Explain ghetto testing, MVP, and (please! get these students out talking with customers!) customer development.
To be fair, some business plan competitions do connect the teams competing with mentors and other resources. Certainly an event with as much press as the MIT $100K event also attracts a lot of nice PR for the winning companies (though there are reasons to not want this).
However, even the teams that do win come out of the typical business plan competition without a clear understanding for how they should move forward. I think this is a tragic missed opportunity. Let’s get rid of the old model, and stop wasting those hard-earned sponsor dollars – seize the opportunity and use a model that actually can help these bright motivated students become entrepreneurs.
Hope you enjoyed the post! I'm Rob Shedd. I like startups and helping others become entrepreneurs.
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Tags: entrepreneurship education, seed stage accelerator programs, startups
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Robert Shedd is currently VP of Product and Technology for Three Screen Games, a Philadelphia-based social gaming startup, which recently launched 
