Tag Archives: Rice

Brave New World Options for Entrepreneurship Education

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Take a look at this list: 20 Essential Open Courses for Budding Entrepreneurs. You’ll see Stanford, Carnegie Mellon, Rice, and — between the lines on that one — MIT, among others. Mark Juliano’s Entrepreneurship and Business, Chuck Eesley’s Technology Entrepreneurship. 

The post in question lists mainly general business courses. Aside from entrepreneurship, they have finance, financial theory, business communication, a couple courses on ethics … it’s not my ideal curriculum for entrepreneurs, by any means. But it’s a fascinating alternative to the more traditional warming-the-seat options.  

I’ve posted here occasionally on business education: try this link for the complete collection. The executive summary is: I’m in favor of it, but only when done right. I’ve got the MBA degree myself but I know lots of people doing just fine in business without it. And times have changed, no doubt. 

I’m thinking that the online availability is a huge step forward; except that it isn’t a step, but rather a series of steps that have been happening for years, in stops and starts. I see the rise in validation, accreditation, and certification of online learning, all of which are part of the problem. 

One of my mentors, a fellow Stanford MBA from a few years before me, always referred to the MBA as “a union card.” He would add: “it means you get to charge more.” 

I’ve never believed viewing the degree as merely that. I always see it as being about the learning involved. The growing acceptance of these alternatives force us to think about whether we’re doing it for the learning, or for the union card. Or not: because you can see in this graphic, some of these online courses come with accreditation and validation. 

Here’s something to think about: when you deal with somebody whose education includes the online courses, how much credence do you give that? As an investor, looking at a business plan? As a potential employer? As a partner? 

Watch This Excellent 1 Minute Elevator Pitch

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Although it doesn’t take an MBA to do it, one of the things business schools teach more often these days, as part of the entrepreneurship curriculum, is the elevator speech, also called elevator pitch.

The one embedded here, from the Rice Business Plan Competition last week, won first prize in a contest that included 42 elevator pitches. It’s a great example. Notice how Gaylene Anderson, CEO of Solanux, hits all the high points, and all in just 60 seconds.

In case you don’t see the video here, you can also click here to go to the source video on YouTube.

And in addition, if you’d like to see more, click this link to see the whole collection.

I’ve posted some how-to advice on the elevator speech on this blog, in a four-part series. What I’m recommending in that series fits very well with what’s working in this contest.

 

10 Reflections On 2 Business Plan Competitions

Business Plan Contest, Venture Contests, , , , , , ,

Last week I spent three days in Houston as a judge of the Rice Business Plan Competition. I haven’t been home since I left April 7 to judge the University of Oregon’s New Venture Championship.

Both of these competitions include four components: the business plan, the business pitch, the responses to questions, and the elevator speech. Every team has at least one MBA student, most of them are all MBA students. The winners get a lot of money.

Rice is the richest. Last Saturday night they distributed $1.3 million in investments, services, and cash awards. Some of that, however, involves investment for equity, or conditions like moving to Houston.

Judging these contests is fun. You read business plans, then listen to the entrepreneurs pitch the plan with slides and demos, followed by questions and answers. Later, you give them feedback. The hardest part, at least this year, is that you have to rank the teams and choose winners.

Here are my 10 reflections:

  1. A great ending: The Rice contest was a $1.1 million contest until the absolute last minute, the last presentation in the awards banquet, when the Texas GOOSE (grand order of successful entrepreneurs) doubled its investment in the winner, from $150K to $300K. The GOOSE society is a phenomenon in itself, worth another post here. I couldn’t find a good link to it to share here, but among the names I recognize are Rod Canion, co-founder of Compaq Computers, and Bob Brockman, who gave the award on Saturday. Right there, with the winners on the stage, they took a marker and, writing by hand, doubled the amount on the check.
  2. A good response to feedback: Clearbrook Imaging, a team from the University of Texas, has a product in its early stages that could, if it works and gets into the hands of doctors, make some kinds of heart surgery much safer. Unfortunately they’ve also got a thick, turbid business plan, and a slow-paced presentation. The underlying product/market fit looks so good my group of judges passes them onto the finals before lunch, then coaches them, in the afternoon, on how to turn their pitch around on empathy and stories and plot. The next day they win the Oregon contest.
  3. Mixed feelings: Innovators from The Indian Institute of Technology at Kharagpur has a way to rig some plastic together to filter water in villages without using electric power, for $6 a unit, to reduce the horrifying death toll of water-borne preventable diseases among India’s rural poor. They didn’t make the semifinals. It’s hard to compare plans offering frills in a consumer market to plans that offer real improvements in health and life for people living in poverty.
  4. Disappointing: The financial projections for a lot of the plans had horribly unrealistic profitability and little or no sense of cash flow. I’m surprised at how many strong teams had flawed financials. Good news: except for the flawed financials, the business plans are getting better than ever. These are exciting new companies with strong markets and excellent teams behind them. And flawed financials are not fatal flaws.
  5. Growth and change: business plan competitions started in 1984 with the University of Texas’ Moot Corp, now called Venture Labs. They were originally a lot like that name, moot, hypothetical, academic exercises in mock businesses. These days the vast majority of these plans are real, with real prospects, real value, and real likelihood of launching. Brad Burke, managing director of the Rice Alliance that puts on the competition, says since they started in 2001 they’ve had 116 teams launch businesses, which raised $337 million in venture capital.
  6. Four for four: For my flight at the Oregon contest I reviewed four plans. All four were believable, launchable businesses.
  7. Six for six: For my flight at Rice I reviewed six plans. Two were a bit early, but promising. Four were real.
  8. Disproportionately male: It’s getting better these days, but it’s still true that judges and competitors are maybe 80 percent male. There’s no good reason for that. I hope it changes fast. And for more good news on this front, the winning team, TNG Pharmaceuticals,  was led by CEO Jenny Corbin, and two others of the six finalist teams included strong women. Priyanka Bakaya of MIT and PK Clean, another finalist, won the $10,000 nCourage Courageous Women Entrepreneur Prize. And Priscilla Silva had the main speaking part for Cyclewood Plastics, of the University of Arkansas, another of the six finalists.
  9. Meanwhile, back in the real world: QRCodeCity, one of the plans I reviewed for Rice, had started in January with an iPhone app called “Scan.” When the Rice contest started in had been downloaded more than 250,000 times. Three days later, at the awards banquet, it had been downloaded more than 300,000 times. They didn’t make the finals.
  10. Toughest finals ever: The Rice event included 42 teams chosen from more than 150 applications. They filtered them down to six teams for the finals. It was incredibly hard to choose between those six. Any one of them could have won. One of my favorites fell behind only because they hadn’t signed the technology license agreement. The team that won, TNG Pharmaceuticals from the University of Louisville, which has vaccine to relieve cattle of fly infestations, was fabulous. But so were the five other finalists.

I’m not done with this subject. In two weeks I do it again for the University of Texas’ Venture Labs, formerly Moot Corp, the oldest and maybe still the best known of these contests. Venture Labs gets the winners of several dozen other contests.

10 Requests From Your Business Plan Reader

Angel investment, Business Plan Contest, Business Plan Marathon, Business Planning, , , , , ,

I’ve started my business plan marathon season again. Between now and the end of May, I’ll read several hundred business plans: some for my angel investment group (Willamette Angel Conference), and others for judging business plan contests at the Universities of Oregon, Texas, Rice, Princeton, and Notre Dame.

paperworkI’d like to use the famous T.S. Eliot line from The Wasteland: “April is the cruelest month.” The trouble is that I like reading business plans, so that wouldn’t fit. I posted about his last year around this time, and here I am again, reading plans.

What does seem appropriate, however, is my plea to business plan writers, wherever you are, if you’re going to produce a plan that I have to read:

  1. Convert it to PDF please. I hate those big honking bound documents. They weigh a ton. Most of my business plan judging involves planes, hotels, and airports.
  2. Give my aging eyes a break. Learn the definition of presbyopia and then reflect on the demographics of angel investors and business plan judges.
  3. Make it about the business, not the science. I want to see target markets, channels, sales, costs, exit strategies, defensibility, scalability, and things like that. Unless it’s software or Web stuff, where I’m more at ease, I’m not going to read or understand your science. I’ll look at your experience and degrees and I’ll take your early sales, testimonials, and such as validating your science.
  4. Summarize well. Make sure you hit the high points. Don’t ever let me finish a summary without knowing what you’re selling to what market, why they’ll buy it, what it does for them, how much money you think you need, how fast and to what sales level you can scale up, strengths, core competence, and a quick sense of your team.
  5. Tell me stories. Make me understand what problems you solve, for whom, and how they find you. Make that story credible. Give me some real examples, real situations, real people, and make it believable.
  6. Show me milestones: milestones you’ve achieved, and milestones you need to achieve.
  7. Don’t give me dumb profits. If you’re going to generate margins at twice the average industry levels, then you better have a convincing reason for why that’s possible. When I see huge profitability, it doesn’t make me think you’re going to be amazingly profitable; it makes me think you don’t know the business you’re in.
  8. Show me your patents if you have them but if you do, show me something about how defensible they are (if at all) and make sure your projections include legal expenses to defend them.
  9. Show me that you know something about cash flow: inventory management if you have products, receivables and collection days.
  10. Think of your reader. We don’t all have hundreds of plans to read, but whether it’s for angel investing or a business plan contest, we do all have a good number.

(Image: AVAVA/Shutterstock)

Interesting Points, But Winning a Business Plan Competition is Still Better Than Losing One

Business Plan Contest, Venture Contests, , , , , , , , , ,

This morning I can’t resist writing about Vivek Wadhwa’s Winner’s Curse post on TechCrunch last weekend. Odd combination: it’s interesting, thoughtful, well-written, about a subject near and dear to my heart, and, at least in the title, wrong.

In the full title of his fascinating post, he says losing a business school business plan competition is better than winning. imageThat title assertion is my only real objection. He makes several great points explaining how business plan contests can be good for people, and how the winner isn’t necessarily the best business, and how these contests should not be confused with reality. No argument from me on any of those points. However, even if it’s not much difference, even if it means very little, winning is still better than losing.

Maybe it’s just a blog post title thing: surprise gets better traffic. Contrarian gets better traffic.

I’ve frequently been a judge at business school business plan contests (Moot Corp, Rice University, University of Oregon, University of Notre Dame, and others) and some non-school contests too (Forbes, for example). I think they’re great fun, great experience, a real educational opportunity, and pretty much right in line with his summary on that post:

This is not to say that the contests are bad. Instead, they educate students in entrepreneurship and motivate them to come up with interesting ideas. But for all of you out there who think a biz plan victory is a ticket to the big time, think again. And for all the engineering students who think any outcome but victory is a waste of time, you also need to think again.

He goes on to say that losing is better because winning generates praise too early in the business life cycle:

I submit that losing in a business plan contest is actually more beneficial than winning. There is a growing body of research that children who are praised too early and too easily end up under-performing peers who are not praised but are told, in constructive terms, they can do better.

I don’t buy that argument. I’ve been judging these contests for 12 years now, and I see a steady progression towards more and more real businesses, out there in the real world, rather than imaginary or hypothetical business. And in that case, as soon as the awards ceremony is over, the winners are right back out there in the real world, fighting the real battles on the front lines, with no time to bask in any glow. It’s reality for all, winners as well as runners-up and also-rans and losers.

So agreed, winning doesn’t mean much; but it’s not bad.

I’ve seen some really good winners in these contests. Look for example at Klymit, or Qcue, just to name a couple. These are companies which won business plan contests and continued growing. Wadhwa says “not a single home-run has emerged from this now-omnipresent practice.” But hey, that’s placing the bar pretty high. We’re talking about a few dozen such contests per year. Is there nothing between home run and failure?

By the way, this is the second really good post by Vivek Wadhwa about entrepreneurship on TechCrunch in barely a week or so. I posted here on the first one. Good stuff. His work is a nice addition to TechCrunch.

(Image credit: Aleksandr Kurganov/Shutterstock)

Do Business Plan Contest Winners Make It in the Real World?

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Craig from trackster.com asked me last week in a comment he added to my Willamette Angel Conference post:

I was wondering with all these business plan competitions that you judge, how many winners or even non winners have you seen turn into successful companies? Are there any examples that you could give?

Yes, a lot of these companies make it. It’s more like half than the one in 10 portion you’d think from the classic assumptions.

I’ve seen lots of these companies launch and become successful, in a much higher proportion than the classic assumption of one or two of every 10.

For example, take a look at this page from the Rice Business Alliance, which has run one of the best of these contests since 2002. The graph here shows the success rate for all of the 166 ventures entered in the Rice contest from the beginning. The trend is very clear. The Rice Alliance says that since 2001 (quoting their website):

  • 66 of our past Rice Business Plan Competition teams are successful business start-ups
  • 192 business teams from national and international schools have participated
  • More than $90 million in capital raised by Rice Business Plan Competition participant companies

Although they make the raw data quite as accessible as the Rice Alliance does, the University of Texas’ Moot Corp, the oldest and most respected of these contests, has to have a similar success rate. I say that because I’m involved with both and the plans and the people are excellent in both. And Moot Corp does post a very long page full of specific successes, with a lot of details. I saw all of the companies they have there from the 2007 and 2008 contests, and I’m not at all surprised that they’ve made it.

I particularly liked cQue, which recently landed a contract with the San Francisco Giants to revolutionize ticketing technology; and Evapt, an automated billing system for software as a service; and several dozen others. They are up and running, they are raising money, they are making it.

To be fair, these two competitions tend to be the best of the best. The entrants are carefully selected. Most of them have won local or regional contests. They are grad students and people in the real world. I’m also involved in some less ambitious business plan contests, like ones for undergrads, that don’t produce a lot of real companies.

And this year I’ve added angel investment, which is a different thing entirely. Like the major academic contests, it is about business plans, ventures, presentations, questions and answers, investors’ points of view, exit strategies, and so on. Unlike the academic contests, there are no MBA requirements, and no faculty advisors.

And specifically, the angel group I’m in, the one I posted on last Thursday morning: there were five finalists that presented to the group. All five of them are very real companies already, even thought they want and in some cases need angel investment of $125K. All five will be there a year from now. The one with the lowest need and least ambitious forecast, a software company called CenterSpace, won the investment. But the four others that didn’t win, led by my personal favorite, Zapproved, have good future prospects. That was also Zaps Technologies, Wicked Quick, and Floragenex. All of these are going to survive and grow.

Business Plans and Prizes and Too Many Winners

Business Planning, Venture Contests, , ,

Most venture contests deal with three elements: the business plan, the pitch presentation, and the question and answer session. Where does the plan itself stand, in the mix? What I’ve gathered from 13 years of judging graduate level business venture contests is the following:

  • The best business plan isn’t always the best venture.
  • The best venture usually has one of the better business plans.
  • The best venture almost never has a bad business plan.
  • There are relatively weak ventures with relatively strong business plans.

I’m in Houston the rest of this week for the Rice University Business Plan Contest. The finals are tomorrow. Winners will be announced tomorrow night. And there, amidst about $800K in cash and in-kind prizes, will be the $2,500 Palo Alto Software outstanding business plan award. With me announcing the winner.

Leading up to that, two days ago, 11 of us met in a Palo Alto Software conference room. It was the culmination of a three-week process that required evaluating the 42 business plans competing today at Rice. The award is for the plan, not the venture. We’ve seen the plans only, not the people, not the presentations, not the questions and answers. We divided them up so that everybody read at least 10 of the plans, most of the people 12, and a couple of people read as many as 16. The participants included me, our CEO, COO, VPs of product development and customer experience, web producer, and marketing managers. To help balance the output, every plan was read by at least four people.

But we had four winners, not just one. There were four plans which were that good.

Rice University and the contest should be very proud of these plans. The teams that submitted them should be very proud of them. After all of the scrutiny, we ended up with four plans that we’d be very proud to award as the best plan.

Several of us had different views on the relative weight of the plan as document vs. the plan as description of the venture. I know that’s a hard concept to swallow, but think of it like this: can a business plan that has every major factor locked down, but has some occasional spelling and grammar problems, be a winner? Is that better than a plan that is beautifully written, easy to read, has great illustrations, looks sensational, but has maybe one hole in the business details?

And how about this one: is a high-risk, high-return plan, taking tens of millions of dollars to yield hundreds of millions 10 years from now, but only if it runs a very narrow gauntlet of challenges, better than a plan that has only medium risk, a product already selling, happy customers, but projects getting to $8 million in five years, with a valuation of $15 million?

Tomorrow I have to announce a single winner, and, happily, we did finally come to a decision on which one to name. But that one is one of four plans that deserved to win.

Don’t Shade Your Eyes, Summarize

Business Education, Business Plan Marathon, Venture Contests, , ,

What if you had to take the classic business plan, developed for an MBA-level venture competition, and shrink it down to 10 pages?

Last Friday I spent a fun and fascinating day as a semi-finals judge at the University of Oregon New Venture Competition. My part of the program was evaluating four ventures developed by MBA students from Clemson, Northwestern, Penn State, and Michigan, along with three other judges. That was one of five flights, so there were 20 teams, selected from more than 100 entrants.

The new rules for this year gave them 10 pages for the business plan, plus up to 10 pages for appendices. The judges loved it, of course, because we have to read all the plans. The teams had mixed feelings.

Summarize. In this context, the venture competition, with teams of smart MBA students, it should have been duck soup (although that particular expression isn’t that popular at the University of Oregon, because the home team is the Ducks).

Keep the highlights. Stick to the headlines. Summarize. I don’t care if you’re the next big thing, with an unimaginably exciting new idea and a great team, you can still create a meaningful summary in 10 pages.

Start with a one-page summary. Then tell a story about the need, and your solution, your market, your secret sauce, your strategy, and your great team. Add in a financial summary, and don’t forget to highlight your capital needs, valuation, and exit strategy. If you do no more than 3 paragraphs in any one of these 10 main topics, you ought to be able fit that in 10 pages using a lot of bullet points and white space. Make it an attractive document that the judges, who tend to have older eyes, can read. Leave some space for some snappy graphics, a bar chart or two, and then include the financials in more detail in the appendices.

Some of the teams struggled too much with the page limitation. Some chose the dark-side option, filling the page with dense, small text. Some skipped important topics.

As we get used to these competitions, with page limitations growing more common, I’m expecting more teams to realize that there ought to be a master plan, from which these summary plans, and the presentations, and the elevator speeches, are just alternative output.

Once they get that, they should then start thinking more about the combined communication impact of the plan, the presentation, and the other elements. Can they summarize strategy briefly in a plan, and then explain it more in a presentation? I think so.  The plan and the presentation obviously overlap, but they both don’t have to cover exactly the same territory.

So today my business plan judging marathon month continues. After the event in Portland over the weekend, this evening I’m going to a three-hour meeting of the Willamette Angel Conference, reviewing business plans, listening to presentations, doing due diligence on plans.  On Thursday I leave for Houston, to judge the Rice University Business Plan Competition.