Something Ventured, Something Gained

The Knapp Venture Competition, the nation’s oldest student-run business plan competition, gives students a dose of business reality.

 

 
Prospectus Alumni
By David Davis • Photos by Dave Lauridsen

Kelsey Doorey (’13) had her corporate future all mapped out. After earning her business degree at UCLA Anderson, she was planning to return to the East Coast and take her dream corporate job.

Then Doorey entered the annual Knapp Venture Competition, which offers UCLA Anderson students the opportunity to present their startup business plans to real-life entrepreneurs, venture capitalists and angel investors. Doorey and classmate Anna Baxter (’13) were “floored” when the business idea they worked on, Vow To Be Chic, an e-commerce rental service for designer bridesmaid dresses, won the competition — and $15,000 — in 2013.

Doorey decided to leave her corporate gig at the altar and, instead, became a newly minted entrepreneur. “Not only did we win the prize money that helped us start the business,” she says, “but two of the judges offered us funding on the spot. The Knapp Competition literally changed my life in one night.”

The Knapp Competition is the oldest business plan competition in the nation. The multistaged contest allows students to hone their business plans with each successive round. The five finalists face off before a panel of judges in Korn Convocation Hall, and past participants have gone on to create successful companies such as Stamps.com and Greenbotics, and popular products such as Crazy Cart.

Philanthropists Cleon “Bud” and Betsy Knapp, who fund the contest and participate in the final round of judging, bring a lifetime of entrepreneurialism to UCLA Anderson. Betsy pioneered enterprises in computer software for years. Bud attended UCLA as an undergraduate and then left to run the family business. He sold Knapp Communications, a publishing conglomerate, in 1993.

“Both of us are entrepreneurs,” says Betsy Knapp. “We have started and run companies. We’re interested in new business formation. It’s a part of business that is intriguing to us. But there are a lot of things that aren’t in the textbooks that we as entrepreneurs learned experientially.”

The competition format is designed to mimic the startup experience for entrepreneurs. Students with an idea for a product or service write a detailed business plan, which entails researching the marketplace and the competition, studying the cost of operations and the delivery of the product, making estimates about revenues and expenses, building a team of executives and employees and establishing the company’s culture.

“This isn’t theory or a spelling bee,” says Bud Knapp. “The students are getting a dose of real life.” UCLA Anderson’s MBA curriculum teaches the tools involved in starting and operating a startup. But students learn by doing, according to Alfred E. Osborne, Jr., senior associate dean of UCLA Anderson. “It’s not enough for me to tell you the theory of the business plan or to show you a sample business plan,” he says. “The most powerful way in which you can learn is to research and write your own business plan. All of the activities involved in that process — the research, the learning, the doing — are necessary for you to develop and execute your idea.”

Perhaps the most daunting part of the Knapp Competition occurs when a panel of seasoned investors questions the competitors about every aspect of their plan, including the idea itself. “Students enter the Knapp Competition enamored with their product,” says George Abe, faculty director of UCLA Anderson’s Strategic Management Research Program. “They think everybody’s going to want it. The fact is they haven’t done the market testing or received market feedback. When market traction isn’t what they were expecting, it’s very humbling.” Christopher Varin (’13) and Marco Franzoni (’13) met at UCLA Anderson and worked together to develop Sportifik, a social network platform for recreational sports leagues. The software business took third place at the 2013 Competition.

Participating in the Knapp Competition was “a really useful experience,” Franzoni says, “because we faced the kinds of questions that we’re dealing with during fundraising in the real world. It was the first time we were challenged about how we get users to make this product viable. It forced us to work hard on narrowing our business model and making our presentation extra crisp.”

Sportifik is currently based in Los Angeles. The privately held software company just gained its first three clients and its first revenue. “We have market validation and a growing user base,” Varin says. “Now we’re moving forward to where we can raise our first round of financing.”

Craig Jones (’14) and Kevin McFarland (’14) also joined forces after meeting at UCLA Anderson. They teamed to create SmartestK12, a software-technology company designed for the classroom. They won first place and $15,000 at the 2014 competition.

The Knapp Competition was the “culminating experience” of UCLA Anderson, according to Jones. “We strategically didn’t enter the competition our first year because we wanted to test a lot and get feedback on our product. It was an amazing springboard for us. We were able to make essential connections that took us from an early-stage company and catapulted us to the next level. It felt good [to win] because it validated what we were doing.”

Throughout the process, says McFarland, “we reminded ourselves that winning the competition does not guarantee a successful business. We’re not a successful company until we have a lot of customers using the product every day in a successful manner. That’s what we’re aiming for.”

Jones and McFarland are currently ramping up the business; SmartestK12 is planning to relocate soon to Santa Monica, Calif. “The fact that UCLA Anderson even has things like the Knapp Competition validated what they tell us: thinking in the next and being entrepreneurial,” Jones says. “That’s more than just talk. They give you something to push for.”

The competition forces students to “think fearlessly” and to “provoke innovation and progress,” according to Osborne. “It is important that students have an opportunity to develop and test their business concepts in the marketplace. They get to see what the experience is like and if entrepreneurship is something they might choose to do.”

The experience includes a healthy dose of setbacks. The student body was “very critical of our idea,” according to Sportifik’s Varin. “That feedback helped us develop the business plan properly and address things like market sizing, the financials and how the business should be run.”

Doorey of Vow To Be Chic remembers struggling to answer a question about customer acquisition costs in the semifinal round. That forced her to do additional research on the topic. When she was asked a similar question in the finals, she was well-prepared. “You’re not always going to have all the answers,” she says, “so it’s important to know how to respond in those situations when you’re put on the spot.”

Vow To Be Chic is now based in Santa Monica, Calif. The company recently raised over $1 million in funding, and tens of thousands of users have signed up with them. Doorey and her team recently launched an expansion for brides, called Little White Dresses, which provides dresses for all of the bride’s events throughout her nuptial experience.

“I never thought I’d have the guts to start a business right out of school,” she says. “Sometimes you just have to put yourself out there because you never know what’s going to happen.”

Indeed, even as these budding entrepreneurs work to grow their nascent businesses, they know that they face daunting obstacles. “I don’t think anything can prepare you to run a startup business full time and make a living off of it,” says Sportifik’s Varin. “It’s very difficult getting your first client, getting your first revenue, building a team and managing operations.”

Every week brings “a different challenge,” according to SmartestK12’s Jones. “This week it’s solving technical hurdles and large user-base issues. A week ago it was hiring people and signing partnership agreements. The only real way to be successful is to not keep having the same problems.”

Ultimately, Jones says, “you learn entrepreneurship by doing entrepreneurship. You have to not be afraid.”

Betsy and Bud Knapp agree on that. The advice they give students is simple and direct. “If you want to succeed, you can’t give up because you’re going to have a lot of ups and downs,” Betsy says. “You have to have a tremendous amount of commitment to the product or service you’re creating. These are the qualities that will enable you to move forward and grow your business.”

The deadline for students to register for the 2015 Knapp Venture Competition is March 3, 2015. UCLA Anderson alumni who would like to participate as judges in the semifinal round can contact the Price Center for Entrepreneurial Studies at 310.825.2985. The final presentations will be held on May 14, 2015.

Next year, UCLA Anderson will launch an accelerator designed to encourage entrepreneurship and foster on-campus collaboration, according to Elaine Hagan (’91), executive director of the Harold and Pauline Price Center for Entrepreneurial Studies.

The basement of the Rosenfeld Library will be transformed into a 10,000-square-foot incubator for nascent companies, with co-working space for as many as 45 people, a presentation area with audio/video capability, small- and medium-sized conference rooms, copy and printing facilities, a kitchen and wireless access. These entrepreneurs will also have access to UCLA Anderson’s research librarians.

 “With the growing interest in UCLA’s entrepreneurial ecosystem, we saw a significant need for on-campus space where UCLA start-ups could work and meet with advisors,” says Hagan. “As the usage patterns of our library have changed, our librarians have worked with us to design an active learning facility that utilizes the best of their capabilities, while physically demonstrating the importance of entrepreneurship and innovation to Anderson and to the campus.”

 The space will be open not only to Anderson MBA candidates, but also to undergraduates, graduate students from other schools on campus and faculty researchers. The facility will host guest speakers, topical seminars and “demo days” for resident companies. As one of the few universities in the country with world-class schools of business, law, engineering and medicine, along with a teaching and research hospital, all on the same campus, the accelerator will offer a central meeting place for UCLA’s disparate communities to pool resources and work in partnership.

“Many of society’s greatest challenges require interdisciplinary solutions,” says Hagan. “At UCLA, we have a history of collaboration across disciplines, and this space will enhance the nature of these interactions.”  UCLA Anderson is working with members of the entrepreneurial, venture and campus communities to identify best practices in the management of co-working spaces and to develop the accelerator’s governance policies. Design details are being finalized, and construction will begin early next year. The accelerator is scheduled to open in the summer of 2015.

For additional information, please contact the Price Center at esctr@anderson.ucla.edu.