Competitions: Winning Is the Easy Part
When Onne Ganel won the Rice University Business Plan Competition in 2003 he could "almost taste" his lucrative future. A recent Wharton School grad, Ganel, then 35, had just earned industry acclaim for his innovative MicroMRI technology, which helps doctors quantify bone strength and quicken diagnoses. More importantly, he had scored $15,000 to finance his vision.
But turning a profit is no easy task. Ganel, now chief executive officer of MicroMRI in Philadelphia, has already brokered licensing deals with Siemens (SIY) and General Electric (GE). Yet he's a long way from his ultimate goal: selling the company. To appeal to big-name buyers, annual revenues must exceed $10 million; in 2006, MicroMRI pulled in just $500,000. "Running a real business is like riding a roller-coaster," Ganel explains. "One day you're up, one day you're down—there's no room for naiveté."
The Reality Check
In the period following their business-plan competitions, many entrepreneurs face a similar reality check. Though entrants spend months—and sometimes years—developing a prize-worthy pitch, they ultimately confront a difficult truth: Launching a business looks easier on paper. "You can talk and plan all you want," says Joseph Hadzima, a founding judge of the MIT $100K Entrepreneurship Competition and chairman of the MIT Enterprise Forum. "But until someone writes you a check, nothing is definite" (see BusinessWeek.com, 5/31/07, "How to Win a B-School Competition.")
You don't need to tell that to Chuck Eesley. After securing a first-place finish in the 2002 Duke University Start-Up Challenge, then-junior Eesley and his teammates parted ways. Before winning the prize, their company, Sun Dance Genetics, which intended to produce drought-resistant corn for developing nations, had seemed like a good idea. But when faced with a real-world launch—and the daunting prospect of divvying up their $50,000 winnings—the students opted to pursue separate career paths. They ceded control of the company to a faculty sponsor. "When we won, we were in a really early stage of development," Eesley explains. "We should've talked things through."
Though discouraging, Eesley's results are understandable, says Hadzima. Because plans require only hypothetical risk, turning them into actual businesses—or thinking about the years you'll spend trying to—can spark a discouraging reality check. "You really have to focus on the customer," Hadzima explains. "And you can't be afraid to revamp everything if it doesn't work."
Revise, Revise, Revise
For some, however, post-competition success is a natural progression. In 2003, Collins White, then an MBA student at Syracuse University, scored an honorable mention at the school's annual entrepreneurship event. Three years later, his Defenshield, which manufactures super-strong body armor for U.S. troops, pulled in $4.6 million. "We found our niche, and we filled it," White says. "It's a good feeling."
But like Ganel, White changed his business plan several times before achieving seven-figure sales. Though his general schematic was "pretty accurate," he needed to be flexible to ensure profitability.
Uri Pomerantz, 25, is well acquainted with this strategy. After winning the Stanford BASES: Social E-Challenge as an undergraduate in 2002, he started Jozoor, a nonprofit that gives microfinance loans to Palestinian entrepreneurs. But real-world troubles, such as a lack of manpower and resources, forced him to refine his plan.
Alongside several microfinance partners, including the much-talked-about Kiva (see BusinessWeek.com, 7/31/06, "A Little Money Goes a Long Way"), Pomerantz re-launched Jozoor as the Shurush Initiative in 2003. (In Arabic, shurush means "roots.") To date, the effort has helped more than 30 underprivileged workers. "A business plan is a good start," Pomerantz says. "But in the end, it's all about working with the right people."
Click here to see a slide show of B-school contest winners from recent years.