This post is the final entry in a four-part series on the value of business plan competitions to startups and entrepreneurs. The previous posts dealt with the Pros & Cons of entering, 6 Questions to Ask Yourself while making the decision, and how to Learn from the Competitions themselves. In this post, I'm going to encourage you to take the results of being in a competition with a grain of salt.
Don't Despair... and Don't Get Cocky
In the end, it's a crapshoot. A business competition takes a snapshot of a company - or maybe a brief video - and tries to assess the likelihood of its success with limited information. There may be other factors, such as trendy technologies and fashionable business models, that have more influence than they should. There may be politics at play. Even in the most impartial circumstances, judges are expected to compare apples and oranges and make judgments as to which is better. The result is that good companies don't always get recognized in the competition and bad ones sometimes make it to the finals (though in my experience they rarely win).
So don't let it discourage you if you don't do well in a competition, and don't let it go to your head if you win. There's a healthy dose of luck involved even though organizers try to make it as fair and impartial as possible. Recognize that your company may have been lucky enough to be based on the hottest technology of the moment (can you say "bubble"??) and win without actually being viable. Doing well in a competition is emphatically not the same as doing well in business.
My advice is to evaluate business plan competitions the same way you do every other resource and opportunity available to your business: Does it meet your needs? At the end, will you have a better business than when you started? More connections that are truly beneficial to you? And what won't you be able to accomplish because you are spending time on competition obligations?
If the competition you're thinking about entering makes sense in the context of those questions, go for it and get the most out of it that you can! As a former competition chair (Ignite Clean Energy) and competitor (MassChallenge) and current volunteer (Cleantech Open Northeast), I can tell you that the volunteers, organizers and sponsors will do the best they can to make it a worthwhile experience for you. All of us want more than anything to help build stronger businesses and accelerate their success. Crowning winners and handing out prizes is fun, but helping entrepreneurs succeed is the best reward possible.
Has this series had any impact on how you feel about business plan competitions? Positive or negative? Let me know!
(Originally published on 4/20/2011.)