Thursday, April 18, 2013

Validating Your Idea: Enter a Business Plan Competition

There are many ways to validate a business idea before building your product. You can get out of the building and talk to potential customers, sign some channel partner deals, create a smoke test or throw up a beta invitation website and get people to sign up online for the future business. That just names a handful of ways. There are probably hundreds if not a thousand ways to validate a business idea. One of my favorites is entering my idea into a business plan competition. The reason I like this approach, in combination with the aforementioned, is it puts your business idea up against others and runs it through some rigorous tests and judging criteria by what I would like to think is an unbiased judging panel. It's another way to validate your idea and get some great feedback in the process -- win or lose!

So, as you can probably guess I entered SlimSurveys into the London Enterprise Business Plan Competition back in mid-March. It is the same place I presented TweetPhoto April 30, 2009. Flassing forward to this years competition, there were a ton of entries. Hundreds of applicants entered of which a couple dozen were selected to the next round and after writing a 80 page business plan in 48 hours I was one of ten applicants accepted into the final round.  From there the 10 of us battled this morning for £29,000 of cash though a 10 minute quick pitch presentation with 5 minutes for Q&A. At 7:30am Pacific time this morning it was my turn. I had the opportunity of taking the idea of SlimSurveys, after writing the 80 page business plan, and pitching a panel of three successful entrepreneurs who judged the plan and presentation against a ton of different criteria.

The judging criteria included:

  • The pitch was compelling, easy to understand, and focused around a clearly articulated problem and market need.
  • The product or service is described completely, concisely and is easy to understand: features and benefits, current stage of development, proprietary position.
  • The Market is clearly described, sized and characterized, as are the target customer. The market size described is in line with the company’s growth projections.
  • The pitch shows an understanding of operations – how the company will make money (for nonprofits-receive funding) and deliver its product and/or services.
  • The pitch demonstrates a understanding of the competitors and alternatives.
  • The company describes a realistic and effective marketing and sales strategy.
  • The company has identified the necessary employees, skills, experiences is needs to succeed. The team has what it takes to execute the plan.
  • The company has realistic financial projections in terms of sales, margins, and expenses.

With a minor technology snafu I finished the presentation within my allotted timeframe and the judges were ready with a handful of questions. One judge asked, "Why are you doing this because you probably don't need the money?" It was a great question. It allowed me to tell the judges that in addition to building a beta invite site, and landing a couple channel partner deals ahead of building the product...winning this competition would be another proof point that would further validate the idea that maybe we have something here with SlimSurveys.

It made me think back to Lean Startup Machine and Startup Weekend and how entrepreneurs can quickly validate their ideas with the least amount of effort and time. Even though I put a bit of leg work into the business plan it was pretty easy to write and by winning 2nd Prize ... £1,000 in cash and support worth up to £6,000, it is yet another validation point for SlimSurveys in addition to customer and partner validation. Next time you're ready to validate what you're doing and you don't quite think you've received enough proof points try entering a business competition or a quick pitch competition and see how your idea stacks up to the field and judging criteria. With a little bit of hard work constantly validating your business idea, you'll find the luckier you get!