It goes on in Hollywood every day: Screenwriters track down every producer in town to pitch a story-the one they're sure will be the next Titanic. Replace producers with judges and screenwriters with aspiring entrepreneurs, and you have your typical business plan competition. These Jeff Bezos wanna-bes pitch their business ideas in hopes of winning the grand prize-usually a cash infusion for the business and extras like free incubator space and serious VC exposure.
The winners of such contests are admired and praised, lauded and worshipped (OK, maybe not worshipped). What happens, however, when the accolades stop and the real contest of survival begins?
Some winners fulfill the prophesies of success. Nibha Aggarwal won the 2000 UC Berkeley Business Plan Competition with Skyflow, a provider of voice and data solutions for automated business processes. Aggarwal, 37, and her co-founder, Anthony Joseph, 34, received funding just 10 minutes after their win. "It was like the doors opened," says Aggarwal. "We were talking to every marquee name there was-we got a huge amount of exposure."
That exposure has proved quite profitable, as Skyflow has steadily grown to 25 employees in its Berkeley, California, headquarters. Mindful of the changing economy, Aggarwal notes, "We are growing slowly, as everybody is in this market-sort of the old-fashioned way, getting customers and getting revenue. That's how we intend to build."
A winning business plan doesn't always foretell success, however. Brent Chinn was one of three winners in the 2000 Business Plan Competition at the Wharton School of the University of Pennsylvania in Philadelphia. He and his two physician partners presented their idea for Digipad, a patient interview software program for helping doctors create medical notes. While the idea looked great on paper, making it fly in the real world proved considerably harder. "We explored a couple different opportunities, but none of them really made sense at the time," says Chinn, 31, whose partners got involved with other projects, effectively putting Digipad on hold.
Though his business didn't succeed as he'd hoped, Chinn still believes participating in the competition helped him. "It was through the process of going [over] the business plan that we were able to see what the strengths and weaknesses would be [if we tried] to jump in headfirst," Chinn says. He plans to use what he learned in the contest, not in his own company, but as a project manager at Aligo, a San Francisco software start-up.
It was in not winning a business plan competition that Ian Eslick found success. Co-founder (with Robert French and Ethan Mirsky) of Silicon Spice, a manufacturer of voice gateway devices in Mountain View, California, Eslick participated in both the 1995 and 1996 MIT $50K Entrepreneurship Competitions-and didn't reach the finals either time. "[In 1996,] we were really focused on building the business," says Eslick, 28. "When we didn't make the semifinalist cut, I understood why. The business plan was still very early [in development], and I knew what was wrong with it."
But Eslick took advantage of not winning. Since he didn't have to prepare a presentation for the finals, he was able to spend his time presenting to VCs to get his company funded. While the contest judges didn't seem too excited by his business idea, the VCs did. So did Broadcom, a broadband technology developer in Irvine, California, that acquired Silicon Spice for $1.2 billion in 2000. Now the director of software engineering for the Carrier Access Business Unit at Broadcom, Eslick routinely speaks to current competitors in the MIT $50K. "[I tell them] that not winning the competition does not necessarily mean you don't have a viable business," he says. "A successful business has a lot more factors associated with it than just the business plan."