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Talk for Money Fest 2021

Thursday I’ll be giving a short (less than 30 minute) talk about financing a new business using entrepreneurship contests at the Innovation Portal here in Mobile. I’m writing this post to plan out what I’m going to say, work through the details in my mind, and to give the participants something to refer back to in case they need it.

Title Slide

Hello. I’m Thomas Nelson. One of the things I do is design venture based contests to promote entrepreneurship. Venture based contests are a great precursor to starting a business. They allow entrepreneurs to validate their ideas in a low stakes environment, get valuable feedback, make connections, and sometimes provide capital to further develop and even launch a business. One question that I often get, is ‘what is entrepreneurship?’. Well, I spent the first year of my PhD program debating that with a bunch of really smart people and we decided that entrepreneurship was whatever we said it was. Not a satisfying answer, but a very useful one for an academic. Since you all are in the real world though, I’d like to offer a more specific definition instead.

Howard Stevenson’s Definition of Entrepreneurship

This is my favorite definition of entrepreneurship, and particularly salient to entrepreneurs seeking funding. Funding is just one of the necessary resources entrepreneurs need to start their businesses, but it’s a very important one. Most new businesses need cash like people need oxygen. As you’ve heard already (if you attended this conference) there are many avenues to acquire this particular resource. This session will focus mostly on one of those ways, participating in entrepreneurship competitions. Specifically…

Preview, or tell them what you’re going to tell them

We’re going to talk about what different types of competitions are out there, what they’re focused on or specialize in and how to win them. I’m going to try to avoid calling this ‘hacking’ a contest or whatever because I’m not sharing a short cut. This is real work. To be honest, winning contests is probably more work than negotiating with bankers, presenting your plan to actual venture capitalists, or mowing yards and banking the money until you have enough cash to start. But, it does have several advantages, some of which we’ve hit on already and some more we’ll cover as we go through the presentation. After giving some advice on winning, we’ll see a few examples, then look at one in detail. Finally, we’ll wrap up with a counter example that’s important to consider.

General Types of Entrepreneurship Competitions

There are probably countless types of entrepreneurship competitions and a lot of ways to think about them. I’ve broken them down based on what you have to do to compete. I’m speaking in general terms here, and each contest will have its own specifics and rules, so pay attention to what the contest documentation says, but in general, here is what you can expect. An elevator pitch competition will generally have you present a one to two minute prepared speech about your business. A business plan & presentation competition will have you giving a longer presentation, usually with a slide deck, maybe a business plan, and/or some additional supporting documentation. A lean canvas competition will have you deliver similar content to a business plan & presentation competition, but focused differently and you will not be asked to supply a business plan. Those are the three main types of competitions you are likely to run into. Hackathons are usually marathon length (Startup Weekend is 54 hours long) events where you attempt to develop a business idea as far as possible, preferably to launch. Often hackathons have in kind service prizes instead of cash. Finally, there are admission competitions. The form of admission competition is usually similar to the elevator pitch or business plan and presentation. You’re usually competing against other companies that haven’t started or are in the early stages of their business, and you’re competing for admission to something. Quite often the something is a business accelerator or other business development program, and if you win the competition you’re accepted to the program and your prize is…. wait for it… more work. There will be ongoing assistance to help you develop your business as well. Top accelerators do an amazing job of mentoring new companies and getting them ready for launch.

Focus of the Competition

Many competitions will have a specific focus. Understanding the purpose of the competition is important if you want to win. For instance, if you enter a competition where the goal of the organizers of the competition is to promote a particular industry but your business doesn’t do anything for that industry you are unlikely to win no matter how great your business idea is and no matter how good your presentation is. These competitions are often created with very specific goals in mind, and it is unlikely that they will approve of a business with a dramatically different focus. If you went through the Burger King drive through and ordered a Whopper value meal how would you feel if you received a piping hot bowl of oatmeal at the window? Not too great I’ll wager. So keep that in mind. That does not mean you can’t tailor your presentation to fit the goals of the competition, but you do need to make the connection understandable so that the judges have a reason to consider you. You can’t win if you’re not being considered.

Read the Instructions

Really, most of what I’m saying today will boil down to this. Read the instructions. Follow the instructions. Win. Other stuff is important too, and you can follow the instructions and not win, but if there were a competition hack, this would be it.

How To Win

It does come down to reading and following directions in many cases, but there is room for tailoring. First, entering the right type of competition is important. At a minimum you must be qualified to enter. For example, if it is a student competition and you are not a student, don’t enter. You can’t win. But wait. If you’re willing to share your idea and the business with a student, and you can find a student that is qualified, you’re back in consideration. If the competition’s focus doesn’t align with yours, you can either not enter, or you can make a case that it does. This may involve repositioning your business idea to a certain extent. For instance, if your business is, let’s say, a baseball training facility for elite athletes, and the competition you would like to enter is a technology focused contest you could stress that you use app guided stop motion photography to improve the swings and fielding of your clientele. Before entering the competition you thought your business was about baseball, but now you understand that it’s about technology. Let me be perfectly clear at this point. I am not saying that you should lie about your intentions, or even change the way you do business. If you have to do that, don’t enter the competition. I’m only saying that you can stress the appropriate parts of the business for the audience you have. This same business might be able, with a slightly different focus, to compete in a health and wellness category at a different competition. Baseball is good exercise, at least at some positions…. We kinda covered point three while we were talking about point one, but it’s worth mentioning twice. You must be qualified to enter the competition. If you are not, you may still get it, but if you happen to win, the error will be caught, and you’ll be out all the time effort and expense of getting to that point. Next, and this is very important, if there is information about how the candidates are being judged, be aware of it. Play to it. If there’s an actual rubric posted or handed out have your practice judges use it to evaluate you so that you can see where you need to improve. If they’re going to go through the trouble to tell you exactly what they want, you should go through the trouble to give them exactly what they want, or as close to it as you can and remain faithful to your business idea. Next, do as much supplemental research as you have time for. If the judges are listed, find out about them. If there are past winners, try to find their presentations. Call previous participants to get the low down if you’re able. Whatever it takes to get the best edge you’re capable of getting. Finally, show up and be amazing. This does not just happen. This happens from practicing, over and over. You should have practiced your presentation many many times before you’re presenting to the real judges. It should be so familiar that you can stop mid sentence, take a shot of Jack, and pick right back up. (I am not encouraging drinking, especially underage drinking, but you get my point.) {A little inside baseball here. That’s why I’m writing this post. I’ll read it tomorrow and see if I have improvements. If I do I’ll make changes. I’ll read it a few dozen times, practice it out loud several times, and expose it to my advisors. I’ll bake in their feedback and then I’ll be ready to present. This is for a presentation that I don’t even know if anyone will show up for, and that no one is going to pay me for. How much effort should you put in if the top prize means getting to start your business?}

Loser?

Even if you do all of that you’ll probably lose. So what? This is Piff the Magic Dragon. Some of you may be more familiar with his older brother, Steve. Piff lost on the first season of Penn & Teller: Fool Us. Piff lost on the tenth season of America’s Got Talent. The eventual winner was Paul Zerdin, a ventriloquist. He has a YouTube channel. Piff has a theater in Vegas named after him. Be like Piff. But how? Just realize that there are many, many benefits to competing besides the prize money, and work the competition with that in mind. Network with the judges (after the judging), the other contestants and the audience if you’re able. Sometimes people go to these events looking for businesses to fund. So, even if you don’t get prize money you could find a partner, an investor, or at least get some great ideas from the other contestants’ presentations. And, like Piff, you’ll get some practice pitching your idea and some exposure. Who knows where it might lead.

Selected Competitions

I’m not going to spend a lot of time describing these competitions. You all have Google. But I do have a few thoughts that these examples might help clarify. The Alabama Launch Pad is a long competition with lots of embedded mentoring. It costs money to enter and there’s no guarantee you’ll be accepted into the program at all, let alone win. But if you do get in you’ll get high quality mentoring and a shot at a large prize. The most important thing you’ll find out by reading about the competition is that it is (surprise, surprise) focused on improving Alabama. They’re all about job creation, so if you’re pitching a business where you’ll be importing your products from China that will be a disadvantage. It can be overcome, perhaps by employing several people in state to sell and service your product for example. But if you don’t stress that you’re unlikely to go very far. SXSW has several tracks, so you can enter in one of several categories. MIT’s Clean Energy was focused specifically on energy, but has transitioned to other green initiatives as well, so don’t think last year’s competition is the same as this years in all cases. I put Rice on this list because it’s the biggest competition I know of. You have to have a graduate student on your team as one of the principle owners, but if you qualify, they give away over a million dollars and have been doing so for a long time.

Lastly, as an example of a hackathon, I want to talk briefly about Startup Weekend. For networking, there probably isn’t a better format. However, Startup Weekend is inappropriate for working on a fully developed business idea. Although it’s often ignored, that’s against the rules and spirit of the event. The idea at Startup Weekend is to develop, from scratch, a new business, and it’s organized to do just that. It’s a better fit if you know you want to be an entrepreneur and you’re not sure what, or if you have a general idea but you haven’t fleshed it out yet. If you have a fully developed business idea and a bunch of supporting stuff like a website or a business plan you are in the wrong place. That being said, I know of several businesses that were created at Startup Weekends that are quite successful, so it might be for you.

Sample Contest

Ok, on to a quick example.

Applying Recommendations

The Lundquist Center’s New Venture Challenge is a multi stage contest. You’ll be at this a while, off and on. How long? Read the instructions. Google is your friend. (It’s not. Use DuckDuckGo instead.) You’ll need an elevator pitch, a full presentation, a business plan, and the ability to answer questions about your business. This competition is student focused but there is not an industry or other focus other than a recently added green track that you may qualify for depending on your idea. Also, half you team must be students, you need a faculty advisor, and there is A LOT of information to read and digest online. This contest is a lot of work. Most of them are. But there are prizes and connections galore to be had. If you qualify, you can get in, and you’re willing to do the work, go for it.

I Call BS!

On the first slide I told you I might be full of it. I believe that the talk you’ve just endured was at least a little informative and that you might have a better chance and using competitions to start or grow your business because you sat here. However, I need to tell you about a student I coached early on. We’ll call her Anne. Anne wanted to start a business making video diaries of people doing oversees adoptions. Imagine a really overpriced scrapbook in video format for people wealthy enough to fly private and adopt cute little Russian babies. Anyway, she came to the department I worked with with this in mind. We plugged her into a local competition, which she won. We then found other opportunities for her to compete nationwide and she did well, as the stats on the slide show. Her presentation was a video, not a PowerPoint. She talked to the video and the video talked back. She had the timing down pat. It was a very smooth presentation. If you’ve seen the scene in Jurassic Park where Colonel Sanders talks to himself on video, it was like that, but this was before Jurassic Park came out. We advised her to make her presentation longer or shorter for competitions. She changed nothing. We advised her to write a business plan. She didn’t. We advised her to tailor her presentation to the judges, or to the goals of the contest, or to anything really. She delivered the same presentation over and over again, ignoring everything we said and did other than paying for her transportation and accommodations. She did enter the competitions we told her to, but I think that’s because she didn’t find any on her own. The results speak for themselves. She broke all the rules, disregarded all the advice, except for one piece. She showed up. She was amazing. And she won. So maybe practice and professionalism is more important than reading the instructions. But it couldn’t hurt to do both.

Questions

I hope that this has been helpful to you. Are there any questions?


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