Let me start this out by saying that I am a fan of business plan competitions: I've co-founded and chaired one (Ignite Clean Energy), helped it merge with another (Cleantech Open), been a judge in a few (MIT Clean Energy Prize, ICE, CTO) and a competitor in one (MassChallenge). After a couple years hiatus (a long story), I am now back to recruiting actively for the Cleantech Open Northeast and unofficially for MassChallenge.
We started the ICE Competition (brainchild of my friend and mentor, Jim Walker) in 2004 because we wanted to get people excited about starting clean energy companies (hence "ignite clean energy"). That's why most competitions start: everyone loves a competition, so they're a great way to bring attention to a skill set (innovation and entrepreneurship), a market sector (clean energy, life sciences), a university or other organization, or even the individuals who start them. And of course the winners tend to receive a lot of press and other attention, often from investors.
I should also point out that, while I did not get involved with starting and running ICE to further my own career directly, the fact is that it led to my most rewarding job up that date, Associate Director of the Massachusetts Technology Transfer Center, which led (eventually) in turn to my starting Plano & Simple. And it also led to the single best night of my professional life, the finals of the last ICE Competition I ran back in 2007: with my parents in the audience (that's us in the photo - damn, wish I always looked that good!), I received a standing ovation from 300+ people as I thanked them all for their support and contributions to ICE and the Clean Energy cluster. Knowing I'd made a real difference to a great bunch of people - volunteers, competitors, sponsors and more - made every sacrifice I'd made in the preceding 3+ years to grow ICE more than worthwhile.
Pros and Cons of Competitions
Each of these competitions has had a significant impact on their intended audience. They have catalyzed the launch of companies, trained entrepreneurs and added jobs to a strapped economy. Each year, the competitors have access to opportunities to get professional mentoring, raise their profiles at networking events and sometimes even win money and other prizes.
But I am the first to admit that they aren't perfect. Business plan competitions can distract you from the mundane business details on which you should be focusing, they usually cost money to enter (though not bucket loads) and they take your most precious resource, TIME. It takes time to fill in applications, create pitches, attend required meetings and workshops, and so on. It's also easy to get caught up in the hype and focus on winning the competition instead of on building your business.
The cold, hard truth is that only a tiny fraction of the competitors are going to be winners. So the question is: are the benefits of being a competitor worth the cost to you in time and money? I think the answer is yes, provided you focus on how the competition can help you build a better business and not on winning. That way, win or lose, you have moved your company forward, possibly faster than would otherwise have happened.
My favorite example of this was when the CEO of one of the finalists for the ICE Competition told me he wouldn't be coming to the finals. I was beside myself: what could possibly be more important than the finals, something hundreds of volunteers had worked thousands of hours to bring about, to say nothing of all the hours I personally had put into coaching him?
Well, what was more important was pitching to Al Gore and other investors at Kleiner Perkins on the very same day. Stan Kowalski, founding CEO of FloDesign, made the decision to skip the culminating event of months of competition in order to have a chance to pitch to some of the leading investors in the field. He made the decision that was best for his business even though it hurt FloDesign's chances to win the competition. Not that it should have any influence on the moral of this story, but FloDesign's CFO, Matt Commons, pinch hit for Stan and they won not only the ICE Competition, but on the next day they also won the MIT Clean Energy Prize.
And FWIW, Stan and Matt remain two of my favorite entrepreneurs and past clients ever. Thanks, guys, for everything you've done for ICE and the CTO, and for your inspiring successes. Don't worry Stan, I am confident that one day you'll be able to move out of that van by the river... (I'll expand on that comment in a later blog post!)
How about you? Have you identified any other pros and cons associated with starting or entering a business plan competition?
(Original publication date 3/20/2011.)