A quick digression on who gets $30,000
May 1, 2000
The Harvard Business School and Brown University Undergrad business plan competitions are in the final stages. I read and listened to several plans, presentations, and write-ups. It sobers me to realize that $80,000 in prizes have been influenced by my thinking.
Here is some of that thinking, made public, in case it helps you with a presentation you’re making. When I say “the best” below, I mean the best of the plans I saw. These observations may not be representative of the whole contest.
The best-written plan was from a Brown undergrad team.
The best demo was from a Harvard Business School team.
The best industry research was done by an HBS team.
The best pre-launch, idea-specific research was done by a Brown undergrad team.
The worst plan was from an HBS team.
The team which had their business up and running and was proving it profitable did not win their semifinal round. Maybe because their business was not sexy and high tech?
The judging criteria contained implicit value judgments about “good” businesses. High growth, huge market cap, original ideas were given a premium. In fact, my personal favorite plan in each competition was for a limited-growth opportunity. In the Brown competition, it was a limited opportunity with a me-too product!
(It makes sense that the judging is biased towards huge-market companies. It attracts more involvement in future contests if “our winners go on to found billion-dollar companies.” VCs and entrepreneurs are less likely to participate in a contest whose winner had a $100,000 idea, even if the plan was perfect and the idea was executed flawlessly.)
The judging criteria sometimes judged qualities of the idea, not whether the plan handled those qualities. For example, a criterion was “originality of the idea.” Originality is fun, but it isn’t necessarily a good criterion for a business plan competition. How about: “do the entrepreneurs recognize how original their idea is[n’t] and have they taken steps to get the most out of the opportunity, given their degree of originality?” Sometimes originality is detrimental! Me-too products have produced spectacular market successes (can you say, "Windows?" "Blockbuster?" "General Motors?").
My actual rankings reflected my feelings about the team, as expressed through their writing. The well-thought out, clear, concise plan left me with the thought that even if the idea didn’t work as expected, the entrepreneurs would find a way to make things work. Other plans had good product ideas, but wildly unrealistic marketing-speak plans left me afraid that their business judgment would be more influenced by Business 2.0 buzzwords than by their ability to respond to the real world.
In many cases, my lack of specific industry expertise left me judging based on the research process the team seemed to use, rather than on the results of that research.