Business plan competition season is getting underway in Boston. Past participants tell their stories and offer advice. Bottom line: it’s not about winning the money.
Lori Valigra
It’s been nearly four years since Micah Rosenbloom and his team were runners-up at MIT’s Entrepreneurship Competition, a contest in which researchers and business students team up to craft a business plan for a start-up company in the hopes of winning prestige and cash.
As Rosenbloom, now an established entrepreneur in Lexington, MA, prepared his keynote speech for the kickoff event for this year’s contest, which takes place on February 8, he thought back on his experience.
“The [final competition] seemed extraordinarily important at the time. But what was really important was that it forced us to put our ideas on paper,” he said in hindsight. “The competition is really more about the process [of researching and writing a business plan] than about getting the money. It was a validation exercise for our product concept.”
His team won $10,000, not enough to file for a patent or rent suitable office space, but it gave them the confidence to start a company.
MIT and Harvard host two of the more well-known competitions for students wanting to learn how to start a company: the MIT $100K Entrepreneurship Competition in May and the Harvard Biotechnology Club Business Plan Competition in June.
Teams research and pitch their ideas for the next hot start-up to a panel of venture capitalists and vie for prize money: $30,000 for the winner of MIT’s competition, and $5,000 and a one-year lease for lab/office space for the winner of Harvard’s contest. The prize money comes from corporate sponsors.
Both competitions can give participants a leg up in starting a business, providing valuable experience in working with a diverse team, learning how to write a business plan, and networking with successful financiers and businesspeople.
“It’s a huge benefit to expose your ideas and articulate them to a sophisticated audience. It’s well worth the effort,” said Terry McGuire, managing general partner at Polaris Venture Partners in Waltham, MA and a judge at the MIT $100K and other competitions.
Road to success
Rosenbloom and his colleagues certainly found that to be the case, even as runners-up. He is cofounder and chief operating officer of Brontes Technologies, a Lexington, MA, 3-D dental imaging company. Founded in 2003, the company received a grant from an MIT fund and then went on to obtain angel and venture capital investment in 2004 before it was bought by 3M Company in October 2006.
Rosenbloom got his start when he and fellow Harvard Business School student Eric Paley (cofounder and chief executive officer of Brontes) attended a mixer for the MIT $1K competition, the fall precursor contest that prepares participants for the $100K. There they met Douglas Hart, the MIT mechanical engineering professor who had invented the technology at the core of Brontes.
They decided to enter the competition, which requires teams to submit only the executive summary of their business plan. Rosenbloom and his team won one of the 10 $1,000 prizes.
Though it is not necessary for $100K competitors to enter the $1K, there are advantages. Team members, researchers and business people often unaccustomed to working together, learn to trust each other and form a cohesive team in time for the $100K. And they can attend workshops and get advice from experts such as lawyers and venture capitalists.
A grueling ride
Getting ready for the $100K requires a significant time commitment. Joel Moxley, a Ph.D. student in MIT’s chemical engineering department, and his teammates won the $100K last year for their idea to commercialize a new antibacterial coating for medical catheters.
Moxley spent 20 to 35 hours a week preparing for the competition, and teammate and fellow chemical engineering graduate student Christopher Loose spent 40 hours or more per week on the business plan—both while continuing their research. They practiced their pitch about 40 times in front of different venture capitalists and mentors. “We got feedback all the way through the process,” said Moxley.
Such legwork can help with one of the hardest and most error-prone aspects of the competition: estimating market size for the product. Moxley and his teammates spent a lot of time at hospitals talking to doctors and nurses, as well as people in the medical device industry. Such preparation also helps contestants think quickly on their feet and give good answers to judges at the competition.
The MIT and Harvard contests aren’t limited to students at those schools: MIT’s competition requires only one team member be a full-time MIT student, and anyone can enter Harvard’s competition. Even people already employed at a company can enter.
This year, the first deadline for entering MIT’s $100K competition, when entrants must submit an executive summary, is in late February. Semifinalists are chosen in March and submit their full business plans in April. Finalists are announced at the end of April or early May. Harvard’s competition typically accepts business plans until mid-May.
MIT and Harvard offer courses or lectures on business plan writing and starting companies. Kanchan Mirchandani, comanager of the Harvard Biotechnology Club and a fifth-year Ph.D. student at Harvard Medical School, took one such class last year and was inspired to enter this year’s $100K competition.
“Boston is tremendously unique,” said Mirchandani. “There is a concentration of science with entrepreneurship and interest to translate science into business ideas.”
Additional information:
$150,000 Ignite Clean Energy Business Presentation Competition (kicks off next month)