What it Takes to Compete

 

Advice from Professor George Abe

  • The business proposition must have a level of concreteness. Does a product exist? Are there customers, patents, advisors, research activity, prototypes, or 3rd party validation of the product? Propositions that are proposals or ideas can work, but the judges need to be convinced that implementation is straightforward. Hence, a magazine concept can work. Be sure to describe the current status of the business during your presentation, as it may deflect a lot of questioning and give the judges a sense of reality.
  • Evidence of Primary Research. Have you talked with any customers or suppliers about the market, competition, or technological feasibility? Did you go beyond Google? What effort was put into the plan?
  • Degree of difficulty. The business proposition must exhibit a challenge which utilizes some MBA training. Hence, businesses which are just built on hustle won't likely get top marks, even if the plan is well presented. A degree of difficulty can be derived from product complexity (high tech) or market risk. Judges generally like a big concept with an element of risk. Therefore, retail stores, medical practices, and consulting often don't do particularly well. Starbucks may not either. That's the nature of business plan competitions.
  • Packaging. Once you have a concrete, relatively challenging story, the next question is how well the presentation is packaged. Do you have good slides and a fluid, confident delivery? You will be evaluated on poise and your ability to answer questions. Backup slides, financials (especially cash flow), competitive analysis, and visuals are important. 
 

How does an idea become validated? Is it feasible?

Be able to discuss risk. Risk factors can be segmented into 5 categories, which are product (or technology), market, competitive, financial and management.

  • Product/Technology Risk. Does the product exist? Does it work? Does it scale? How is it made? Is there patent protection or is it needed? Do users have switching costs to use your product?
  • Market Risk. What's the Total Addressable Market (TAM)? Build your TAM from the bottom up. That means knowing the number of potential customers and price. How does your product solve the market problem? Is the market growing or is your story about taking market share? What is your market entry strategy?
  • Competitive Risk. Have a competitive matrix. "No competition" is not a good answer. Discuss competitors along 1 or 2 axes of competition. Big/small? Foreign/domestic? Whatever is relevant. Be prepared to discuss competitive factors beyond product and price, such as strategy or financial strength.
  • Financial Risk. What are your cash requirements? How much runway do you have? Present sensitivity analyses, at least in your backup slides.
  • Management Risk. Most projects will be student operated, so you won't need to say much about this risk, but know whether it is believable for you to operate and scale this business. However, if there are luminaries, inventors, advisors, strategic partners or investors involved with the story, then you should say so, provided you have their permission. Get credibility. Does anyone on the team have industry experience?