Since the dawn of mankind, people have been questioning the meaning of life. But only recently have people (including the media) begun questioning the meaning of business plan competitions:
- Why do business plan competitions exist?
- Are they a worthwhile pursuit for serious entrepreneurs, or a distraction and waste of time?
- Do they help produce “successful” companies?
- Which ones are noble, and which ones are sketchy?
- How important is the prize money?
The increased level of debate is a reflection of the rapid growth in the number and size of business plan competitions in both academic settings (graduate, undergraduate, and high school) and as part of regional economic development efforts. For-profit companies (e.g. Intuit) and media (e.g. TechCrunch, VentureBeat, Miami Herald) are staging their own contests. We even see entrepreneurs competing on reality television (Shark Tank).
In just the past week, both the Wall Street Journal and NYTimes.com have examined the motivations of those who enter business plan competitions, as well as the reactions of “losers.” (In fact, non-winners almost always say they have gained from their participation in business plan competitions. A terrific example of this comes from Julia Hu of Lark Technologies, Inc. in her article posted on the Xconomy blog.)
We hope to see even deeper scrutiny of business plan competitions in the future. We want to know about the potential for conflicts of interest among judges. Should serial competitors be allowed to become serial winners? To what extent are seasoned entrepreneurs gaining entry to collegiate competitions? Is online voting a legitimate way to select competition finalists or even winners? And many more questions.
But we also plan to be cheerleaders. We believe the increasing prevalence of business plan competitions is a positive development, and that these events are helping to produce new opportunities for entrepreneurs and ultimately new enterprises.
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