Start a business. start a business. Start a business. As a reader of Entrepreneur, you hear that phrase often. And for the participants of the first annual 2004 SEED Business Plan Competition in Santa Barbara, California, this past February, it seemed to be the chant in the air.
SEED, short for Spirit of Entrepreneurship and Enterprise Development, is the brainchild of David Newton, founder and president of TechKnowledge Point Corp. His Santa Barbara firm helps small businesses and startups find research and business contacts to help them grow their ventures and brings academic research to the business community. (TechKnowledge Point also compiled Entrepreneur's 2004 college rankings) The competition is part of an overall strategy that encourages bringing together business ideas and people who have the research, capital, connections and general know-how to get a startup off the ground.
The business plan competition attracted graduate and post-graduate students from business schools across the country to present their ideas on ventures ranging from fuel-cost-management services for trucking companies to made-to-order art prints for interior designers. From rethinking old ideas to creating a brand-new niche in a growing market, these budding entrepreneurs came prepared to exceed expectations. The excitement was palpable, and, in many cases, the teams came with their businesses well beyond the planning stage, ready to enter the execution stage.
Of the 35 business plans submitted, eight were chosen to be presented at the semifinals in Santa Barbara in front of a tough group of judges who threw hard questions while making solid suggestions for the aspiring entrepreneurs. According to Newton, the plans were scored on elements such as the strength of the management team; a clearly identifiable business model; fully fleshed-out costs and cost structures; whether there was a large, viable market ready for the product or service; and the overall attractiveness to investors.
"We were pleased to find that, as opposed to a stack of 35 plans dealing with some kind of precision technical instrument or wireless telecom, the whole range was there," says Newton. From pharmaceuticals to medical devices to an adventure-travel Web services site and road-safety-testing equipment, the plans ran the gamut.
Taking home the top prize was ThruSkin Technologies, the team from the University of Georgia in Athens. Helmed by Michael Clark, 33, Solomon T. Garner Jr., 26, Toby Mercer, 28, and Mark Moore, 34, and their business plan is to create and market nutraceutical products, which include supplements from natural sources with proven health benefits.
Their first product in development is a glucosamine topical treatment to relieve the causes and symptoms of osteoarthritis. Garner, a student at the University of Georgia College of Pharmacy, had been researching the product for his studies, and he linked up with Clark, Mercer and Moore in the business school to find a way to commercialize what he'd developed in the lab.
The fact that these aspiring entrepreneurs have combined their backgrounds in medicine, pharmacology, sales and business development certainly added strength to their business plan. But what really earned ThruSkin Technologies the first-place prize of $10,000 in seed money, an office computer system, and an automatic berth in the University of San Francisco School of Business and Management's business plan competition was their already detailed knowledge of the industry they planned to enter. "One of the strong advantages is that the winners have already immersed [themselves] in the business in which they're going to be involved," says Kenneth Shein, managing partner at Prime Energy Partners Ltd. in El Segundo, California, and a judge in the finals. "That makes a big difference in the quality. We find that those [competitors] that have actually developed their business plans out of their own experiences within the industries and sectors they're involved in tend to be better."
Though elated after their win, the team from ThruSkin Technologies is wasting no time in making their plan a reality. They intend to enter a few more business plan competitions to raise their profile while building the $500,000 in capital they need to launch the company. "Our experience presenting [our idea] was great. We met some VCs and others with great business history," says Mercer. "We're furthering the business part every day. I think we're all pretty motivated to see where it goes."
Yes, there was a winner with a stellar business plan-but there were seven other semifinalists who also have the potential to build their plans into successful businesses. Look for these entrepreneurs to make some serious waves in the near future.
- Inspirae Healthcare, representing the University of Florida in Gainesville, took home the second-place prize of $5,000 in seed money. Inspirae, which in Latin means "to breathe life into," focuses on overhauling medical devices-safely making items that are classified as single-use devices reusable.
Co-founded by Scott Kissinger, 36, and his partners, Inspirae plans to resell the devices to hospitals at a greatly reduced cost. With a combined background in medical-device sales and distribution, the Inspirae team hopes to meet the needs of hospitals and doctors for cost reduction and safe and sterile instruments--while earning a healthy profit in a growing market.
- Flexon Solutions LLC, hailing from the University of Iowa in Iowa City, claimed the third-place prize of $2,500 in seed money. Founders Michael Keller, 22, and Bryk Lancaster, 24, who both share a background in electrical and computer engineering, developed a product to test road-safety conditions. Their flagship device is intended to be used by Iowa Department of Transportation (DOT) officers to determine the level of reflectivity in road paint.
The pair also created a software platform to transmit the data more efficiently to DOT offices. In doing research at the university, the Iowa DOT approached the pair to do a preliminary research project on possible solutions to the issue. "When we first did the research, we didn't know what others had done to solve the problem," says Keller. "The reason we decided to go forward was the response we got from the DOT people." In fact, the officials were so pleased with the concept that they placed an order for the product on the spot.
- ExtremeDrive Adventures, the team from the University of Denver, is led by Keith Anderson, 28, Jeremy Harrell, 26, Mike Minihan, 27, and Brian Wilson, 26. The company was born out of Wilson's idea as an undergraduate to sell adventure gear online. After graduating and working in the mortgage business for a time, Wilson returned to his original concept and morphed it into a service company selling extreme adventure vacations online.
Teaming up with Anderson, Harrell and Minihan to grow the idea, they are currently looking to secure the reservation software themselves. (Right now, they do it through a third party.) Booking trips both nationally and internationally, Wilson notes, "It's kind of like the Orbitz for adventure."
- Fuel Services Corp. of Wake Forest University in Winston-Salem, North Carolina, is led by Timothy Sheehan, 27, and Bill Watson, 29. The company offers risk-management and logistic services to help trucking companies manage their fuel costs. With combined backgrounds in both business and the trucking industry, the pair saw small to midsize trucking companies going out of business when fuel prices rose. Sheehan, who came up with the initial concept in his first year of studies, fleshed out the idea with Watson.
To hedge the risks trucking companies face when entering contracts with companies that don't compensate them for fluctuating fuel prices, the team will cap gas prices for truckers for 12 months. Fuel Services then absorbs trucking companies' potential losses and makes up the difference in the derivatives markets. This means truckers, who operate on slim profit margins, won't be forced into bankruptcy by changing gas prices. Says Sheehan, "We will almost be an insurance policy."
- Inkwell Fine Arts LLC, the team from the University of Louisville in Kentucky, is led by Jason J. Henry, 34, Anil K. Nair, 37, and Heath E. Seymour, 32. The company founders were inspired by their desire to sell high-quality art prints to interior designers via a highly efficient Web catalog. These entrepreneurs brought varied backgrounds to the table: Seymour deals with the artistic and creative side, Nair runs the IT side, while Henry runs the operations side.
The plan's uniqueness is that interior designers can order prints to their specifications-to the exact size, color or medium they need. And because Seymour is an artist--he knows this concept is actually good for other artists as well--it increases their chances of selling their work. "We're going to make a go of it," says Henry. "The concept is there, and the interest is there in the market."
- Leading Lazonics, the team from the University of Arizona in Tucson, includes Brad Chusid, 22, Julie Hughes, 22, and Rahim Hussain, 21. This trio of entrepreneurs partnered with the University of Arizona's Office of Technology Transfer, which is designed to match technologies with the people who can commercialize them. The department holds a patent on a tunable laser that focuses many beams at once and thereby improves the efficiency and affordability of technical products made by companies like Nortel Networks or Lucent Technologies.
The company, which is in talks with the University of Arizona's Office of Technology Transfer to obtain the rights to market the laser, would aim the product at the fiber-to-the-home market; although their B2B operation ultimately aims to make home connectivity super fast across the board. Says Chusid, "We explored a lot of other industries first, but this industry has great potential to grow over the years."
- MedfoLink, the team from Columbia Business School in New York City, is led by Rajkumar Bakhru, 20, Joseph Gerrien, 20, Armen Kherlopian, 21, and Andrew Wen, 31. Created out of a project in their bioengineering class, MedfoLink software is designed to help governments detect disease outbreaks and bioterrorism in the earliest stages. The program would generate health statistics--for example, a sudden rise in smallpox cases in a city or state would trigger a red flag in the system.
After researching the amount of money set aside by the government for homeland security, the team realized they had a compelling business idea. They expect to market it to hospital emergency rooms and possibly insurance or pharmaceutical companies down the line. And, notes Wen, "I've been involved with tech companies before, and I wanted to do something with a mission."