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Start-up competitions: Are they worth it?
Recently, I had the chance to be one of the judges at a start-up competition.
After the event, I was thinking through whether these competitions are helpful to the participating start-ups and if so how.
Overall, my conclusion is that these competitions are indeed helpful but the start-ups need to be strategic about picking the right competitions and not overdoing it by entering too many of these.
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Free marketing through competitions
Start-up competitions help you in many ways.
Free marketing
This is self explanatory, I guess.
For a cash strapped start-up, getting free publicity through the right competition could be hugely helpful.
To pick an example from my Boston days, the MIT 100K competition has led to the creation of about 150 companies over the years including successful ones like Akamai Technologies.
The start-ups in this competition get reasonable amount of recognition/free marketing through various media circles.
Illustration: Dominic Xavier
Exposure to investors and mentors
Through these competitions, a start-up can also get exposure to investors and mentors in a lower risk setting.
If an investor gets exposure to your start-up through the competition and likes you s/he will most probably follow-up to take the conversation forward.
Also, through these competitions, a start-up could meet experienced entrepreneurs who could mentor your start-up to success.
Firming up the business plan and pitch
The structure around these competitions forces you to think through your business plan and helps you shape it better.
Also, your pitching skills (either the short elevator pitch or longer version) will definitely get exercised and refined through the various stages of these competitions.
Illustration: Uttam Ghosh
Answering tough questions
If the competition has the right set of judges, the start-up will be asked some tough questions around their business plan.
This would be a great way for the start-up to prepare for answering such questions and thereby refining their business plan in a lower risk environment.
Illustration: Dominic Xavier
How to pick the right competition for your start-up
When you are participating in a start-up competition, there are a few things you must watch out for.
1. Pick the right competition
I think this is something that start-ups don't necessarily think about.
I would encourage the start-ups to think whether the competition serves the above mentioned benefits (and anything else specific to your company).
In addition, is the competition in the right domain/industry for your start-up (e.g. consumer start-ups vs enterprise vs medical technology, etc.)
Illustration: Dominic Xavier
Steer clear of over exposure
This is one common issue.
When I look at some of the competitions over the past year that I have judged or attended, I find that some start-ups have entered almost all the competitions (and some have not won any of them). So much so, that someone called a start-up a "professional competitor".
This might be alright if you are winning these competitions. For example, I know a start-up in the US that won every business plan competition they entered and ended up using that as seed money. But, if you entered a couple and didn't win, it's obviously not the end of the world.
After all, I'm assuming your goal is to build a successful start-up and not necessarily winning these competitions. Please think about this.
If anything, entering too many competitions might hurt your chances of getting funded by an investor (that is, if raising outside capital is in your plans), since they would wonder why so many other investors who looked at the company through these competitions did not invest in you.
Illustration: Dominic Xavier
Avoid premature exposure
This is also something to watch out for.
If your business plan is premature and you will not be able to do a good job pitching/answering questions, you are better off refining your pitch before entering a competition.
After all, the saying that "First impression is the best impression" holds true for start-ups as well.
You want to put your best foot forward in these competitions and for that, you need to be really well prepared.
Illustration: Dominic Xavier