BACK TO THE FEATURE INTRODUCTION

This year I had the exciting opportunity to serve as one of six organizers that took the 2nd Annual CIBC Ivey Business Plan Competition from it's home front at Ivey to become Canada's first nationwide MBA entrepreneurial showdown. This brief article is not another rah-rah about how we can all be the next Bill Gates by dropping out of school, however, even considering Microsoft's recent woes, this is not a bad goal. Rather, I am going to reflect upon my experience with the business plan competition, bringing your attention to the very encouraging popularity of science-based entries in this type of competition. Today, students that combine their science background with an entrepreneurial spirit have an unprecedented opportunity to turn ideas into CASH, as investors today aggressively scour college campuses, seeking out plans based in technology and health sciences.

So keep in mind those success stories such as Jerry Yang and David Filo of Yahoo.com, because they are an important source of inspiration for the next generation of entrepreneurs, which can include you! Maybe an entrepreneurial venture is not for you, but don't make that decision before looking into the facts. The opportunity is for real, demonstrated by the fact that top-tier consulting firms and investment banks have to compete with young companies for their share of Ivy League graduates, even with the rough markets as of late. Take the option seriously; entering a business plan competition is a good way to get a taste for the action without the risk.

What Is All the Fuss About?

The CIBC Ivey competition was created to promote entrepreneurship throughout Canada, and this year it attracted 35 teams from universities across the country, representing over 100 students. With $25,000 in prize money, the winning team took home $15,000, and each of the top five teams came away with some prize money. This type of payout is pretty typical of the many other competitions out there. Even so, it isn't the money that drives most of the participants. These competitions give students a chance to test their ideas with leading venture capitalists and other members of the business community. A vote of confidence from a group of this caliber certainly helps young entrepreneurs seriously consider an entrepreneurial career.

The good news is that the system works. These competitions do produce new companies, as the following table from Inc. magazine demonstrates. (See the complete article: "Upstarts: University Tournaments".)

Total yearly prize money

Companies Hatched From Universities That Stage Business Plan Competitions and Track the Number of Resulting Companies Launched

Number of companies launched since 1996

MIT*

$50,000

20

University of Texas, Austin*

$18,000

15

Harvard

$25,000

12

University of Arizona

$5,200

11

University of Oregon*

$14,000

6

University of Chicago

$30,000

5

University of Georgia*

$1,000

3

* Hosts intercollegiate competition.

From my direct experience with the CIBC Ivey competition, I can assure you that these competitions do attract top-tier talent, both in judges and entrants. Since "colleges have become the farm league for the next generation of start-ups" ( Fortune, Dec. 10, 1999), you can bet that the all-star firms are there, judging.

For those plans deemed to be high in potential, the prize money is nothing compared to the potential investments that interested venture capitalist judges might make--often starting in the millions. The most rewarding aspect of my involvement with this competition was undoubtedly the chance to meet such outstanding people. Throughout the day of our final presentations the presentation hall was buzzing with energy. Of course, winning is great, but just going through the competition experience is of tremendous value. Just by participating, you can't help but build a very powerful personal network.

Where Does Science Come In?

It is true that most of these competitions are in fact targeted toward MBAs, but in addition to MBAs, most teams include other students or outside experts in computer science, health science, etc. Also, more and more students with science backgrounds are choosing to pursue an MBA in addition. At The Richard Ivey School of Business, for example, roughly 30% of the 1999 entering class came from a science or engineering background.

The winner of this year's CIBC Ivey Business Plan Competition, Dementiaguide.com, is firmly based in the health sciences, and computer science for that matter. The company is developing interactive software that can be used by those suffering from Alzheimer's disease, as well as by their caregivers and physicians. The software aims to enhance the quality of life of Alzheimer's patients and it will be available both on CD and through the company Web site. Dementiaguide.com's Web site provides detailed information on the disease as well as reports from clinicians and scientists who are investigating new treatments and pharmaceutical breakthroughs. The judges were very impressed with the company's rounded venture team, which leverages the expertise of a world-renowned Alzheimer's clinician and an experienced interactive software developer.

Overall, the sciences were clearly represented in this year's top five finalists. Of these five finalists, there were three dot.coms, built squarely on proprietary software, and two businesses in the health sciences.

Even if you have no intention of becoming an MBA, you'll be glad to know that business and science types are less different than you might think--I've met plenty of both. You'll be amazed that one of the biggest things separating you will be vocabulary, not something hard to overcome. Both students are ambitious, working hard to discover and create. Business people know that they will rely heavily on scientists throughout their careers, because innovation today is driven by scientific advances more than ever.

You Do Have What It Takes!

Clair Biddulph and Nicole Methven, the two MBA students from Saint Mary's University behind Dementiaguide.com, are clear examples of students with a flair for both science and business. You should be very confident that with your background in science, a little practice would help you develop a strong business sense. Make sure that you don't overestimate the competition--just put in thought, energy, and time and you will definitely be competing with the best of them.

So what skills do you need to knock the judges' socks off? I am not oversimplifying when I say that high-potential investors, such as venture capitalists, generally care about only two things. The first is the opportunity itself--have the entrepreneurs picked a market that is growing rapidly and do they have a powerful, new source of value that potential customers are willing to pay for? The other primary consideration is the strength of the entrepreneurial team itself.

Many potential entrepreneurs in such competitions incorrectly focus solely on the written business plan, justifiably so, because most competitions have this element right in their name, as does ours. Keep in mind that judges screen these plans through a fine filter. They do want to see comprehensive plans, specifically to demonstrate that the entrepreneurs have not forgotten to consider major opportunities and/or risks, but beyond this reason the details of the plan are not that important. It is a cliché today that "the business plan is out of date as soon as it leaves the printer." Convince them that you are going after a big market, that you have an edge on existing and potential competitors, and that you have the core members of a rounded management team in place. If your team has gaps in skills, bring experts on board by creating a board of advisors. Professors are usually anxious to help.

You may notice that the preceding discussion is basically about selling. That's right. Besides strategy, business is all about selling, sometimes recognized by other eloquent and highly technical terms like "story-telling" and "public relations." Don't worry, that statement will scare as many MBAs as it does scientists. All of the networking, planning, and presenting that comprise these competitions are essentially exercises in selling yourself to investors and potential partners; good practice for conducting the same exercise with customers. The most important parts of selling are self-confidence, credibility, and genuine concern for those you are selling to. You build these skills by practicing them.

Once you are done presenting to the judges, they will assault you with questions. They approach the question period the same way they approach the written plan, asking basic, hard-hitting questions that seek to clarify the business opportunity and your ability to pull it off.

Other articles in this issue will go into detail about constructing a business plan, so I won't touch on that here. My final suggestion is that you don't just focus on the popular university-based competitions. There are also a growing number of competitions sponsored by companies themselves, many being venture capitalists, and even some competitions targeted solely to a specific scientific field.

Good Luck!