I thought and wrote about this a while back – but only now had I got chance to finish and publish. Enjoy!
Business Plan competitions, if poorly executed, will dilute and change the perception of participants, mostly students, about running a successful startup.
I’ve seen by my own eyes 2 startups, won first and second prizes of a somewhat famous innovation award in Europe, collapse within 2 years.
Business plan competition, depending on how it is organized and tailored, may have very different impacts.
I was taking some entrepreneurship course a while back in which we were asked to write a full-flesh business plan. My team sent in our business plan to a famous national-level business plan competition. We were very excited to receive the feedback for the first few rounds. We brainstormed, made changes to the plan and submitted to the final round.
To our astounishing surprise, all the teams that are selected as finalist already have a company running!
Then what’s the point of that business plan competition? Why not just organize some VC-funding events?
And why do these companies apply for this competition? Free money.
You probably must have read a lot about what makes a startup successful. I am going to restate 1 of the most important factors: The team.
These business plan competitions, how could they examine the team factor. Judge through the individual CVs? That’s individual’s performance. The team’s working cohesiveness is something that only time could prove.
If we think along these lines, then i think a business plan competition is of little usefulness. The more useful things are incubation programs that seed funds small startups (like KTH innovation, NUS Incubator, YC or NDRC Launchpad).
All these being said, it’s still good to participate in a business plan. You get to hear feedback from experts. You get to meet people that share the same dreams, and even better if you win, you’ll get some cash, maybe some funds to start your business.
Talking about winning competition. I also saw people who won some competition, and suddenly changed attitude over the night of competition – They think they are better (i.e. more talented) after winning the competition.
That doesn’t make any sense right? I mean, not like stock market, your intelligence/knowledge level can’t shoot over night, right? The only thing that changes is your own perception about your talent, being affected by external factors.
All and all, don’t fall into the trap of thinking you’re talented when getting some prize over night. And be aware of business plan competition.