Recently, I served as a judge in a semi-final event for the 2014 NYU Berkeley Center for Entrepreneurship Business Plan competition, dubbed “The Entrepreneur’s Challenge.” The final event was held last Friday at NYU, capping nine months of preparation by hundreds of aspiring entrepreneurs. Comprised of several dozen teams, it was ultimately winnowed down to winners in three categories: Technology ($75,000), Social Enterprise ($50,000) and New Venture in Any Category ($75,000).
Each of the winning ventures had one very compelling characteristic in common. (More about that in a minute.)Some of the young students and seasoned entrepreneurs sitting with me at the event were surprised at the winning selections, but I wasn’t. Having produced, pitched, taught and evaluated business plans and marketing campaigns my whole career, working with fast-talking money-changing Mad Men types, I picked the same winners the official judges did.
So, what exactly does it take to launch, differentiate, compete and scale a business idea into a profitable enterprise that attracts loyal customers, secures investors and thrives until such time as the entrepreneur decides to sell, expand or merge? From the official website of the NYU Entrepreneurs’ Challenge, the following are just some of the criteria, quoted verbatim, italics inserted for emphasis:
“…Not any old ideas. What we’re interested in are disruptive ideas, ideas with the power for great impact and influence. Ideas that challenge assumed boundaries and inspire a sense of what’s possible.
“The $200K Entrepreneurs Challenge provides you with the framework and motivation you’ll need to think and do what no one else is doing…”
Here’s my view of what the judges saw in this year’s winners:
1) Conscious competence – and the commitment, confidence and drive to turn an incipient idea into a viable company, i.e., to “scale.” By the time competitors get to the finals, they have lived, breathed, dreamed and agonized over their business ideas, making dozens of revisions. All of this has helped them further establish and demonstrate their competence, confidence and drive to differentiate, solve true marketplace needs and aspire to be the best solution to those needs.
2) Forget “analysis is paralysis.” In a competitive arena where millions (let alone thousands) of investment dollars and/or sales to consumers are in play, research is king, queen, and master of the universe. The winners demonstrated they had performed painstaking research into and testing of the differentiating strategies, operational levers and financial models that would turn their concept into a business offering worthy of at least initial investment beyond their friends and family. They considered every possible method for launching successfully, accelerating awareness, building positive perceptions and securing attractive customer bases, while also demonstrating they could manage unnecessary costs, fix weaknesses and address threats efficiently and effectively.
3) Practice, practice, practice, and be willing to take and apply what may seem like excruciating advice. The most motivated among the NYU competitors participate in energizing but grueling boot camps and multiple preliminary competitions, representing thousands of collective hours of sweat equity and brainpower expended. If it’s true that to become truly competent, one needs to have engaged in an activity some 10,000 hours, then I suspect the winners did that and more. If you consider yourself an expert already and resist the notion of all but the most essential business advisors, chances are you won’t sustain your business for long or you’ll struggle at some impasse where you absolutely need fresh thinking.
4) A truly differentiated product or service that answers a compelling marketplace need that the new firm can meet better, cheaper or faster than existing products or services. As good as all the finalists were in stating the need for their services and their differentiating competitive advantage, the judges rejected all but the three winners for the following reasons:
a) Unfocused or incorrect strategy: business models that were too complicated or too simplistic to make money and scale sufficiently.
b) Risky operations: underestimating logistical constraints and the inherent costs involved (among them, inventory costs, privacy issues and insurance liabilities); the team’s lack of industry experience; inability to address serious technological challenges.
c) Weak branding and/or lack of a marketing expertise: either too little or too much investment estimated for target audience segmentation, other market research and marketing itself to acquire initial customers, let alone build a brand that would scale, be sustainable and yield ROI in a reasonable amount of time.
So, what was the secret ingredient, the winning factor that distinguished the prize winners? Venture capitalists and other financiers ask a lot of questions regarding the marketplace need for a new offering, and the questions all boil down to this: is your business offering a vitamin or a painkiller? In a similar vein, is your business a pain to use?
The ultimate winners of the NYU competition crafted and made compelling business cases for offerings that addressed marketplace pain. Take a look and see what you might be missing in your own business offering.