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."
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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."
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