The Rice Business Plan Competition: Inside the Battle of the Startups
By Ajay Amar, Ph.D., May 24 2016 01:46PM
According to GMAC (maker of the GMAT), 29% of people who plan to apply to full-time MBA programs have one goal in mind: to become an entrepreneur.* Victor, a former Austin GMAT Review student, is one of these. Victor is in the midst of a career transition – he recently left his role as military commander at Fort Hood and is preparing to attend Duke University’s Fuqua School of Business this fall, in order to pursue his entrepreneurial ambitions.
Before leaving for business school, Victor attended this year’s Rice Business Plan Competition (RBPC), known as “the world’s richest and largest graduate-level student startup competition.” Hosted by the Rice Alliance for Technology and Entrepreneurship and Jones Graduate School of Business at Rice University in Houston, the RBPC drew 42 student teams from all over the world to compete for about $1.5 million in cash and prizes over three days in April.
Says Victor: “I wanted to observe as many startup teams as possible pitch their plans. I wanted to see it all: the good, the bad, the ugly. I’ve spent most of the last nine years in various management and operations positions in the U.S. Army. How will my skills and experience benefit my team and me during my career as an entrepreneur? What are common characteristics amongst good/bad teams? These are a few of the questions that I hoped to begin to answer.” In this blog post, Victor shares what he learned at the startup competition for all of you future MBA-entrepreneurs.
Day One: Startup Showcases and Elevator Pitches
Judging from the crowd at RBPC, all kinds of people have been bitten by the entrepreneurship bug. “I saw a mix of students from a variety of disciplines. There were MBAs, educators, athletes, engineers, doctors and medical students, lawyers, and veterans,” Victor observed.
Lesson One: Always Be Ready.
As soon as he arrived at the event at 5:00 p.m., Victor saw his first startup lesson in lost opportunities: "Most of the teams hadn’t arrived yet, but a few were setting up shop. Even though the showcase wouldn’t start until 5:30 p.m., judges started rolling into the showcase way before that, and gravitated towards the few teams who were there early. This seemed like it could be a huge advantage for these teams, as they had some extra time to present their ideas to the judges, but they didn’t seem mentally prepared to talk to the judges. ... I think that if any team had shown up early and was ready to answer questions, they would have made a huge impression on the judges."
The Startup Showcase gave teams the opportunity to speak to judges and potential investors one-on-one, but few teams had prepared on a strategy on how to engage. Victor recalls, "I saw a couple of teams sort of hiding behind their tables. On the other hand, one team had some of its team members behind the table and others in front. When someone walked up to view the displays, the team members in front approached the judge and answered questions standing beside him/her. "
Lesson Two: Show, Don’t Just Tell.
Some teams had carefully prepared to show off their products. Others had not. "The bare minimum display was a laptop with a PowerPoint presentation, while the best displays had a combination of tablets, laptops, professional banners, and a prototype of their product,” Victor says, and naturally, “I tended to gravitate more towards the most interesting presentations.”
Victor also noted that during elevator pitches, the show-and-tell approach seemed most effective: “I thought the teams that brought some sort of prop, especially a prototype of their product, helped listeners remember the pitch better.”
Lesson Three: Prepare to Execute.
In a very high-pressure situation, the teams that made it to the finals had one thing in common: They had carefully thought out everything ahead.
Victor says, “A couple teams presented good ideas but had to guess several times when investors/judges asked them questions. It seemed to me that judges picked up on the biggest concerns that a team had and then asked about those concerns. What was worse was when an investor asked a question that a team should’ve previously thought about but hadn’t. The best prepared teams had slides ready for certain questions.”
Days Two & Three: Competition
Each startup team comes prepared to present a business plan to a room full of judges. Teams have just 30 minutes to make an impact:
• Setup....................5 minutes
• Presentation.....15 minutes
• Q&A.....................10 minutes
Day One provides the teams a practice round (not in front of the public), and the actual competition is over the next two days. There are three rounds: first round, semi-final round, and final round. Out of the original 42 teams, only 15 made it to the semi-final round. (The remaining teams competed in a “challenge” round.) Teams in the final round pitched to all of the RBPC judges/investors, about 200 people.
The well-prepared teams had practiced every aspect of their pitch, even the set-up. "As soon as it was their turn, they dashed straight to where they were going to pitch and were set up several minutes early."
"In contrast," Victor adds, "I saw many ‘challenge round’ teams that were simply not prepared. They walked into a room full of potential investors fumbling for laptops and scrambling to get set up. One team struggled to find the file that contained their presentation."
Lesson Four: Provide Proof.
The difference between the winners and the rest of the pack? They didn’t just have a good idea. They had brought the data to prove that it was a good idea. "Investors want to see proof. The more proof the better,” Victor says. “The best teams had data based on tests they conducted. The more realistic the tests, the better."
The teams that couldn’t prove the worth of their ideas were dead on arrival. “One team presented technology that would be built into the concrete structure of oil rigs. They tested this technology in a well that was 40 feet deep. Though the idea was very intriguing, several investors thought that the test was almost irrelevant, as the technology would need to survive under far more pressure than their test demonstrated.”
As Victor looks back on the Rice Business Plan Competition, his main take-away was that the Eureka! moment of inspiration is less important than the rest of the process. "This was an eye-opening experience for me. Previously, I placed more importance on how sound a given idea was. I heard one investor say to another that he was ‘up to his neck with good ideas. I need these teams to put more rigor into development.’”
The bottom line for startups? “Though the good idea is still very important, less common is the team that is committed to putting in the hard work necessary to show that the idea is worth the investment. Moreover, the level of the quality of work, organization, preparedness, and professionalism shown by a team serves as not-so-subtle clues to its members’ reliability and mettle."
Whether you’re set on becoming an entrepreneur, climbing the corporate ladder, or getting ready to apply to business school, the lessons of RBPC hold true for all of us. Opportunity appears less because we’re lucky or smart, and more because we’ve worked hard to prepare.
Find out more about the Rice Business Plan Competition here: http://www.ricebusinessplancompetition.com
*The 2016 mba.com Prospective Students Survey Report; survey of 10,017 prospective students in 2015.
**Photo courtesy of Rice Business Plan Competition
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