Business plan competitions (BPCs) serve an important role in the innovation ecosystem and many have served as launching pads for successful companies and entrepreneurs. There is a delicate balance that should be acknowledged when deciding which business plan competitions to participate in and how to maximize return on investment (ROI) on your most valuable asset – your time.
How to chose a business plan competition to participate in:
Not all competitions are created equal. From what I have experienced first hand as an entrepreneur, mentor and investor there are at least three broad categories of BPCs: 1) The top tier uber competitive, 2)The esoteric and 3) The rest. As an entrepreneur you should focus as much time as possible on garnering first hand feedback from future customers, developing/refining the product, and generating revenue. If you can achieve these three tenets of entrepreneurism, you will increase your chances of building a successful venture.
The top tier BPCs carry the name brand and are typically affiliated with an academic institution (e.g. MIT $100K Entrepreneurship Competition, Stanford $150K Entrepreneurship Challenge, Tufts Classical $100K Business Plan Competition). As such, these BPCs draw top entrants from not only their respective communities, but occasionally clever entrepreneurs who have an idea and recruit an affiliated student or professor to join the team. These BPCs are fiercely competitive and are judged by top venture capitalists and business academics and practitioners.
The esoteric BPCs are specific to regions, corporations, or social causes. A great example is the $1,000,000 Global Startup Competition MassChallenge. MassChallenge attracts top entrepreneurs and businesses to Massachusetts and creates a hub of innovation. In the past two years over 1,000 companies and entrepreneurs have entered MassChallenge. The quantity is equally matched by both the quality of the entrants and the resources that MassChallenge provides to its entrepreneurs. Access to legal counsel, accounting, successful entrepreneurs such as Desh Deshpande and Josh Boger are invaluable to aspiring entrepreneurs and ventures.
When considering which BPCs to enter, entrepreneurs should weigh several factors including the reputation of previous winners, the quality of the sponsors/judges, the publicity factor of the competition, and the time investment required amongst other considerations. Overall BPCs can be a great way to refine your plan and generate buzz. A final quick note to entrepreneurs: the prize money should be the last reason why you enter a BPC – a successful venture generates revenue, not charitable contributions.
Dave