Winning Business Plan Competitions – The reasons why you didn’t win
This weekend at an out of town engagement an old friend and mentee asked me a simple question. Why do you decline or reject participants to the various business plan competitions you judge here, in the Middle East as well as in the Asia Pacific region.
Today when I finally finished judging the [email protected] Social Innovation Fund shortlisted entries my thoughts went back to our weekend conversation. Here are some notes as a judge who has been evaluating pitches since 2002.
Winning Business Plan Competition: Step One: Make it beyond the first cut
Your first challenge as a startup in any competition is making the first cut. As judges we generally receive about 10 – 50 times the number of entries compared to the number of prizes that we can give away or slots available for recognition. So if I have 75 entries for 3 grants you have to make it beyond my first cut. The first cut is the initial short list a judge draws that he wants to focus on after his first pass on the contestants.
Making the first cut is partly a question of discipline and partly a question of effort. Here are some of the things that impact how business plan competition judges create a first cut
- Fit with category or business plan competition theme. If you are pitching for a Social Innovation Fund run by a technology association, please make sure that you clearly and adequately address how you are going to go about bringing a social revolution using technology. Before you make the pitch, try and pass it by the smartest people you know to check if it makes it beyond their “sufficient and necessary” condition test. A sufficient and necessary condition tests the linkage between your reasoning and its relevance and appeal. Just because something makes sense to you, does not mean that it will make sense to the judges.
- Answer the questions. The prequalification sheet business plan competitions use is your worst enemy. Each competition has a selection criterion; each element of the criteria gets translated into a number of questions. You have to answer the questions keeping in mind the theme of the competition. Take the questions and the forms seriously and spend as much time on answering the queries as you would in crafting the cover letter of your life for the job of your dreams. Think about why the question has been asked, how others would answer it and what can you do to really stand out amongst all of those answers. Not filling in the form, filling it flippantly or dumping irrelevant marketing collateral are all mistakes I have made in the past that have cost me. I would rate this as the single biggest reason why participating teams get chopped off my list. You are really close to your idea. I am not. I can’t see what you can see. You have to help me see it with your eyes.
- Make my life easier as a judge. While as an investor I may have a commercial interest as a judge most of the work I do is without any fees or commercial considerations. I do it because judging ideas and helping teams reach their commercial potential is an incredibly fulfilling experience. It keeps me young. Having said that, given the number of companies that I need to wade through to get to the few that matter I really appreciate it when an applicant goes out of his way to provide me with information, data, arguments, testimonials and relevance that make it easier for me to grade him. When a presentation or submission is done well it is an indication that person presenting respects our collective intelligence and time. He has made the effort by structuring and rehearsing his pitch to ensure that we get what we need quickly, grade him and can move on to the next contestant. I really appreciate that as a judge. There are some very basic rules that you have to follow. Take a look at the following two courses where I spend a fair bit of time on the respect my intelligence question and pitching: ( Making winning business plan pitches, Business Plan Pitching Case Studies).
Winning business plan competitions: Step Two: Get beyond love, get specific.
Once you have made it beyond the first cut, a judge has a really tough job. If I have three prizes with 75 entries I may pick as many as six winners for my short list. These winners have all made it beyond my first cut because they fit the business plan competition theme, they have answered the question, they have scored high and they have all made my job easier as a judge by giving me the information I need to score them. They all love their ideas, this much is apparent but they have also helped me see why their idea is worth loving.
Now comes the tough part – how do you pick the first three and how do you rank them?
Most competitions that I judge are implementation oriented. We give away a cash prize in the form of a grant. Depending on the nature of the competition and grant the participant may have to reach a few milestones to complete the terms of the grant and our effectiveness as a judge may be linked to how many participants reach these milestones.
To assess if you can reach these milestones as a judge I generally need to understand:
a) How do you make money or your business model?
b) Who is your customer – or your customer profile?
c) Why would they buy a product or service from you?
d) Who are you and why are you relevant to this idea?
e) How well do you understand the problem being solved?
f) How credible is your roadmap? Do you even have one?
g) Will giving you this money really change our world?
h) Do you really need money to make this work?
Unfortunately my bias has always been towards implementation. If your idea in its first phase will simply generate a report, I will most likely shoot it down. On the other hand if you can take the cash grant and ship version one of your product within three months I may become one of your strongest supporters. I want you to go out in the field and touch customers, to sell to them, to handle rejection. But remember saying that you will and your ability to do it are two separate questions and over the years as judges we have developed our own tools for assessing your ability to deliver. A large number of these tools rely on how credible your answers are to the above questions.
If you do an outstanding job you are in my second cut. If you don’t you are not.
So we are now down to the top three. How do I rank them and pick a winner?
You would be surprised by the answer. I don’t, you do.