What do business plan competitions accomplish?

I had lunch with a good friend last week—someone who supports tech entrepreneurship and the larger Seattle startup community. He asked if there was research to detail the value of business plan competitions. What, he asked me, do business plan competitions accomplish?

UW Business Plan Competition Investment Round 2015

A sea of student teams, judges, and mentors at the Business Plan Competition Investment Round

There are 350+ entrepreneurship centers in US colleges and universities, and my sense is that less than 70% of them have competitions called business plan competitions, startup competitions, new venture competitions, etc. Some programs require their own students to participate in their competition, a good number of them have national or international scope, and a number of them have themes (social, tech, global, undergraduate, graduate). Most all of them award money, and some of them, like Rice University, offer BIG money.

OlyKraut, UW Business Plan Competition 2014

OlyKraut, UW Business Plan Competition 2014

Competitions, in my opinion, shouldn’t be easy, and students should never get a grade for competing. If you want to mimic the realities of the entrepreneurial world in the safe environment of a university, you have to up the ante. Make the competition as real world as possible, with deadlines and deliverables that require student teams to use all the resources they can muster to succeed.  Yes, we assume that students are smart, talented, driven and motivated. How good are they at combining those personal characteristics with an idea, a vision and turning it all into a compelling business? It’s a test. But not like any they’re used to.

Competitions require that student teams butt up against reality. Anyone can write a business plan, but tell me about your execution strategy. What traction do you have to date? Give me a customer profile. Who’s your mentor, your industry expert? Who on your team is going to leave to take a job after graduation—and who’s starting the company?

UpHill Designs, UW Business Plan Competition 2014

UpHill Designs, UW Business Plan Competition 2014

The UW Business Plan Competition is badly named, and we know it. We started the event in 1998, when every major university was starting a  BPC. Then it was about the plan, but the plan was demoted in 2006 and now the 100+ teams apply with an executive summary. In the 18 years we’ve offered our Business Plan Competition, 4,091 students on 1,278 teams from 16 colleges and universities around Washington State have applied. We’ve given out $1.3 million in prize money/seed funding to 128 winning teams. We guess that 75+ teams that went through the competition are still in business, contributing to the (mostly) Washington economy. The 2003 grand-prize winner, NanoString, went public in 2013.

But here’s the real value of the BPC:  it’s hard. It takes discipline and motivation and sheer determination. It demands that teams overcome doubt and anxiety, team dynamics, and their own misconceptions of how things should work or who deserves what. It requires them to move past the paralysis that will surely come when their initial market vanishes or when financial projections are scoffed at. The pain and frustration would make it easy to quit. And some do. The survivors become entrepreneurs.

Click to share

Click to share

 

 

 

Meet the Author

ConnieBourassaShaw_editsAs director of the Buerk Center for Entrepreneurship at the Foster School of Business, Connie Bourassa-Shaw works to integrate entrepreneurship into the student experience at the University of Washington. She’s responsible for the strategic direction of the center, ensuring the relevance of its curriculum and practical experiences, working with student entrepreneurs, and developing new initiatives. The Buerk Center for Entrepreneurship, which received a $5.2 million naming gift in January 2013, produces the UW Environmental Innovation Challenge and the highly visible Business Plan Competition.