Business plan competitions give flight to fledgling ideas
Gene Monteith |
Wednesday, July 28, 2010
Not that long ago, Katie Hill and Russell Gottesman were living in Chicago and wondering why nobody had ever thought of selling 10-second audio ads on public buses and trains.
Today, they live in Dayton and run Commuter Advertising, a startup with advertising agreements in Dayton; Champaign, Ill.; Kansas City; Toledo and Rockland County, N.Y.
While the idea itself may have seemed too good to fail -- after all, public transportation systems are starving for revenue and advertisers are always looking for new ways to reach customers -- lots of innovators fail because they don't know how to move an idea from drawing board to marketplace.
That, in a nutshell, is what university business plan competitions are all about. And Commuter Advertising is a shining example of young Ohio companies that are seeking out the business resources available by participating in them.
Hill and Gottesman, who moved to Dayton as a result of their first contract in 2009 with the Dayton Regional Transit Authority, emerged the winner of the 2010 University of Dayton Business Plan Competition, one that has grown from 24 entries four years ago -- the first year of the competition -- to 82 entries this year.
"We had been revisiting our business plan over and over, and felt this was a good place to see how it was stacking up against other ideas in the marketplace," Hill says of the UD competition. "There are a series of work sessions leading up to the competition -- coaching that helps you tweak your elevator pitch, which is the first round to get into the competition. And then, once you get past that, sessions to help make sure you have the content in your business plan that is really needed, which is invaluable."
The payoff? A better refined business plan, a more professional pitch and exposure to the big dogs who move and shake within the venture capital and business communities.
Not to mention the $20,000 prize Commuter Advertising walked away with. Or a subsequent invitation to participate in the prestigious Draper Fisher Jurvetson and Cisco Global Business Plan Competition, an international event in which Hill's firm became the only finalist from Ohio. Or a $300,000-award through the Ohio Third Frontier's Entrepreneurial Signature Program earlier this year to further build the company.
Dean McFarlin, chair of UD's Department of Management/Marketing and NCR Professor of Global Leadership Development in the School of Business Administration, says business plan competitions are a way to provide needed advice, mentoring and technical assistance to businesses just starting out.
"It's hard to know how many competitions are run out of universities," McFarlin says, "but I would say around 200 or so. If you look at the top 25 programs according to Entrepreneur Magazine, there's not a single ranked school that doesn't have a business plan competition."
McFarlin says universities have a number of motivations for supporting nascent companies in this way.
"For some schools, the primary motivation is helping to economically develop the region where the school is located," he says. While that's one reason for UD's contest, that's not the only motivation, McFarlin says.
"This is a terrific opportunity," he says "to create exposure in the community, in the region, and the country to help build the brand of our entrepreneurship program" -- ranked among the top 10 undergraduate programs in the country. "But the primary motivation, I think, is education. We require as part of our competition rules that if you make it to the final round as an entry, you have to involve either a UD student or a UD alum."
Similarly, the Fisher Business Plan Competition at Ohio State University is open to the community at large but requires teams to include at least one Ohio State student or alumnus. Columbus-based EXCMR -- which is developing and demonstrating a non-ferral treadmill that can be placed next to magnetic resonance imaging equipment without interfering with the imaging process -- finished second in the 2008 Fisher competition.
Now housed at the TechColumbus incubator, EXCMR's participation in that contest was invaluable, says Gary Smith, the company's director of commercialization.
"The competition sets the stage for capturing intellectual property that might be sitting -- I don't want to say sitting idle, because these are ideas that are trying to find their way out -- but it provides an opportunity for a business assessment, a market assessment, and then to establish a strategy for how that commercialization might happen as a new company," Smith says.
EXCMR recently attracted a $1.4-million Third Frontier grant to help build and demonstrate its treadmill systems at four locations around the state.
Nanofiber Solutions won the Fisher competition in 2009 and, like EXCMR, is maturing its business at TechColumbus. Its innovation: a nanofiber that mimics human tissue and thus can be used to grow cell cultures that behave as they would in the body, rather than in a standard petri dish. The technology has ramifications for pharmaceutical development, STEM cell research and in better understanding how cancer cells move from one part of the body to another.
Winning the competition built momentum for the company, says co-founder Jed Johnson, whose involvement began with his Ph.D. research in the college of engineering. Johnson, now chief technology officer, says the competition "gave us a pretty major jump start with some recognition and a little bit of startup cash ($85,000 in cash and in-kind services) and services from local companies here."
Subsequently, Nanofiber Solutions won grants from TechColumbus' Tech Genesis Fund, the National Institutes of Health and the National Science Foundation.
In Cincinnati, Georg Weber, founder and CEO of MetaMol Theranostics, also has felt the benefits of participating in business plan competitions.
In 2006, Weber -- who is also associate professor of pharmacy at theUniversity of Cincinnati -- participated in the Cincinnati Creates Companies competition. A collaborative effort among the UC College of Business, CincyTech, BioStart, the Hamilton County Business Center, Children's Hospital and others, the competition was an 11-month course of intense classroom training, structured mentorship and, finally, an internal business plan competition in which participants vied for up to $25,000 in seed funds.
Weber, who founded Metamol in 2007, says the experience was crucial in his understanding of how businesses work and how the business world views new entrepreneurs.
"The person who was my mentor kept joking that the first version of my business plan was a technical document on cancer -- not a business plan," Weber says. "He helped me turn this into a business plan, and I found it ended up being somewhat successful in external business plan competitions."
MetaMol, which is working on a way to inhibit a molecule that contributes to metastasis of cancer cells, went on to enter the Purdue University Life Science Challenge in 2006. While the company didn't make the finals that year, a second try in 2007 landed MetaMol fifth place and $10,000 -- which helped defray some of Weber's patent costs.
EXCMR's Smith says while the exposure gained through business plan competitions is valuable to both the inventor and to universities, the real value is to the community at large.
"Creating companies is what our economy needs."