The short answer is that you need to be very, very good. There are a lot of terrific, aspiring entrepreneurs out there, and so a bit of luck is useful too. Having said that, winning isn't everything.
buySAFE is actually a product of the 2002 Wharton Business Plan Competition, but the plan was not the winning plan. PayMyBills.com has a similar story. The founders and my good friends, Jeff Grass and John Tedesco, were finalists, but not winners, in the 1999 Wharton Business Plan Competition. However, they went on to raise tens of millions in venture capital and they built a really nice business in the process.
Simply going through the business planning and critique process is the real benefit of these competitions in my opinion. Business plans are funny things. Business planning is a fairly simple exercise, but if you haven't previously developed a plan, the effort can seem very daunting. Business plan competitions typically provide basic advice to the entrepreneurs on how to get started. The competitions also have multiple stages with each stage presenting an opportunity to receive valuable feedback from the experienced entrepreneurs and investors that are judging and/or mentoring in the competition.
The following Business Week video does a nice job of covering the basics regarding what you need to know before submitting your business plan.
In the video, the University of Oregon's Randy Swangard talks about how to win that business plan competition — what to keep in mind before you apply, and why it's sometimes better to come in second.
The Wharton Club of New York is running a business plan competition now, and here is all the information you need to enter as a participant. I highly encourage you to participate if you can.
Also, you might find the following NY Times article interesting. "Beyond Grades: Business Students Put Their Start-up Ideas to the Test" does a nice job of covering the ins and outs of business school business plan competitions.
Have fun, and good luck!
The U.S. Presidential race has reached a critical juncture. The Republicans have a confirmed nominee in John McCain; as for the Democrats, Hillary Clinton has bounced back, while Barack Obama retains a marginal lead in terms of delegates. How the presidential race evolves will be shaped in part by the increasingly worrisome state of the U.S. economy. Consumer prices are rising, oil has crossed $103 a barrel and gold is nudging $1,000 an ounce — suggesting that the economy could be entering a phase of 1970s-style stagflation. Fed chairman Ben Bernanke, however, told Congress last week that he doesn’t anticipate stagflation, and he continues to indicate his willingness to keep cutting interest rates. What lies ahead for the U.S. and world economies? Knowledge@Wharton discussed these questions and more with finance professor Jeremy Siegel, author of The Future for Investors.
Last month I talked about blogging platforms and the value blogging can bring to ecommerce sites. When a website makes the decision to begin a blog and decides upon a blogging platform, it will then have to decide who will blog and how often. Time allotted to blogging is also a relative issue, as is subject matter. So why bother at all? Relative to static ecommerce sites, search engines consider blogs more real and trusted because blogs tend to have fresh content and there is a less financial, more informational link between a blog and its readers. An ecommerce site should take advantage of this tendency by adding a blog to augment the overall site.
I had the opportunity to speak at The Wharton School, University of Pennsylvania last week about an article that Dr. Eric Clemons recently authored for the Journal of Management Information Systems, "An Empirical Investigation of Third-Party Seller Rating Systems in E-Commerce: The Case of buySAFE". My presentation was focused on marketplace economics and specifically about information asymmetry, signaling, the "Market for Lemons" concept, and buySAFE. In addition, I was able to share a few thoughts about my entrepreneurial experience with buySAFE.
As always, I had a great time as the guest of Dr. Eric Clemons, and I enjoyed hearing the passionate questions, insights and feedback from the students. One of the students posted an article about my visit on his blog, The Un-Wharton.
Bob Greene, co-founder of Contour Venture Partners in New York, wants you to know that venture capitalists aren’t half as tough as their reputations would have you believe. "A lot of entrepreneurs think VCs are haughty or arrogant," says Greene, who earned his bachelor’s degree from the Wharton School in 1982. "All the VCs I know, we do it because we love it. We want to see entrepreneurs succeed. If the wrong impressions get cast, it’s because we get inundated with requests for review and capital."
The most important advice Jeff Fluhr, W’96, Eng’96, got as a young entrepreneur was to go with his gut. Fluhr, founder of online ticket sales website StubHub, says he had to stay focused on his vision for the business even while others who became involved in the business advised differently. “I learned that it’s important to listen to what others have to say,” said Fluhr. “But you have an obligation to do what you think is right.” Fluhr co-founded StubHub in March of 2000 and was responsible for setting the overall strategic direction. As CEO, he led the company to its position as the fan’s top choice when looking for a safe and trusted way to purchase or sell event tickets online, attracting A-list investors and advisors including major league sports teams, NCAA universities and top performing artists. StubHub was sold to eBay in early 2007.
Last week, I had the opportunity to speak to a few hundred business school students at the Robert H. Smith School of Business, University of Maryland. Michael Beveridge, buySAFE’s VP of Business Intelligence, joined me in speaking at the invitation of Professors Guodong (Gordon) Gao, Peter Weiss, and Mingfeng Lin. The students had previously read "buySAFE – Creating and Profiting From the Bonded Seller Advantage", a case study on buySAFE authored by Wharton professor, Dr. Eric Clemons. Here is the presentation that Michael and I shared with the students… "eMarket for Lemons – The Economics of an Evolving eCommerce Marketplace".
As always, it was a terrific experience for me. The students were extremely prepared, and they had definitely done their homework on buySAFE, information asymmetry, and the ecommerce marketplace in general. If you ever want to get an excellent sense of how well your marketing efforts are working or how well you are educating the market about your solution, I highly recommend inviting a couple hundred college students to study your product or service and let them give you feedback. I loved it!
The Wharton Business Plan Competition took place earlier this month, and NP Solutions was the big winner for 2007. The new venture took home the $20,000 grand prize for a business that provides a polymer based injectable hydrogel treatment for back pain. Obviously, I wish these folks a bunch of luck with their new business.
As you may already know, I am a big fan of these collegiate competitions. buySAFE (formerly known as BondMyAuction) is a product of the Wharton Business Plan Competition, and so I can speak from experience when I say that these events can be very useful in getting entrepreneurial ventures launched. I actually entered the business plan competition in 2000 and 2001 with different ventures as a student.
Then after graduation, I teamed up with Peter Niessen, a 2002 MBA grad, to enter BondMyAuction in the 2002 Wharton Business Plan Competition (You need at least one current student on your team to participate, but the rest of the team can be alums, etc…). Peter was a terrific teammate, and he and I were able to make it to the Finals of the competition. Again, it was a great experience, and you can read about it in this recent article by the New York Times – "Beyond Grades: Business Students Put Their Start-Up Ideas to the Test"
One last interesting note for you…
Jeff Grass, buySAFE’s CEO, was also a finalist in the Wharton Business Plan competition in 1999 along with his business partner, John Tedesco (John is currently the CEO & President of Guardian Mobile Monitoring Systems). Jeff and John launched PayMyBills.com shortly after graduation, and they ultimately sold the company to PayTrust in 2000. Today, the company’s service is owned by Intuit, and it powers the bill payment and management solutions for some of the country’s largest financial institutions.
Needless to say, collegiate business plan competitions can provide aspiring entrepreneurs with a generous leg up on the formidable challenges of starting up a company out of school. For me, the Wharton Business Plan Competition experience was invaluable.