The Best Business Plan on the Planet
Go behind the scenes with one of the judges at Moot Corp., a world-renowned business-plan contest hosted by the University of Texas at Austin.
Moot Corp. diary: Behind the scenes at the business-plan contest everyone wants to win
Where can you go to find the most brilliantly conceived, rigorously researched, and persuasively pitched start-up ideas in the world? You might go to school. In fact, you might go to one of the business-plan competitions that have become important rites of passage for M.B.A. candidates all over the globe. At these events, the best and brightest graduate-business-school students--guided by the savviest entrepreneurship educators--test their concepts and themselves, hoping to win not just praise and prestige but, more important, big-time capital from the investors in the room.
What do these people know (that the rest of us want to learn) about creating the most exciting businesses of the 21st century? This past spring I got the chance to find out. I served as a judge at Moot Corp., the 15-year-old, internationally renowned, quintessential competition of its kind, hosted by the University of Texas at Austin.
The contest was held over a single event-packed weekend and began for me early Friday morning, May 7, in the heart of the Austin campus--home of the infamous sniper tower, whose silhouette appears on UT stationery. There were 25 teams competing, including 6 that had won not just their own schoolwide contest but an interschool business-plan competition as well. The Austin contest wasn't just academic; the teams all appeared to want to start their businesses as soon as possible. Some had already raised seed capital. A few were already in business.
Here's what I saw.
FRIDAY, 7:35 A.M.
Judges meet for coffee, fruit, greasy muffins in the B-school's faculty lounge. Two dozen of us (practically all white men), with me the only journalist. Most others are venture capitalists or bankers--sensible, since the point is to evaluate the plans based on their potential as investment opportunities.
UT's Gary Cadenhead--a tall, affable academic who's run the event for seven years--greets us, reviews the drill. Today five divisions of judges will see five teams each. Each team will have 20 minutes to make its pitch, then another 20 minutes to handle questions from the judges. When the round is over, each team will come back before its panel of judges for feedback on its strengths and weaknesses. The winners from each division will face off tomorrow, in front of different judges, in the finals.
The criterion for choosing a winner is simple: Would you personally invest in the company? No reward for effort alone. "Sometimes somebody does a strong presentation for an opportunity you wouldn't invest in on a bet," Cadenhead says.
8:10 A.M.
My judging panel gets one of the small, amphitheater-type classrooms with fluorescent lighting and no windows. It will be a long day. We were mailed the business plans in advance, so I already know who our teams are: from Oxford University in the U.K., Capital Mining Royalties Pty. Ltd., a group that plans to find untapped veins of ore in western Australia and collect royalties from mining companies; from the University of Michigan, our only "dot com," GetOutdoors.com, a Web site that will sell climbing gear; from the University of Illinois at Chicago, J.H. Reid Corp., maker of a very strange chair in which you sit on the floor to watch TV; from ESAN (Escuela de Administraci×n de Negocios para Graduados), Granos Inka S.A., with a plan I had to read twice to figure out, calling for the growing of yellow corn in Peru; and from the University of Texas, Vusion Inc., which has a new technology for real-time chemical testing. Or so the team says. We find out later it's not quite ready for market.
One judge I already know: Rob Brough, an outspoken Aussie, president of Breeze Technology Holdings, in Thousand Oaks, Calif., a start-up with some shoe technology and a business plan that was a Moot Corp. winner in 1994. The other judges are a pharmaceutical-industry executive, a director of corporate communications for DuPont Photomasks, a managing partner at PricewaterhouseCoopers, and me--a senior editor at Inc.
8:30 A.M.
The opening act: Capital Mining from Oxford. Team leader Allan Trench starts by throwing up a slide picturing a pile of gold bars. Trench's team is looking to raise $3.5 million--not mind-boggling, but a serious amount. He walks along our table handing each judge a chunk of rock and a foil-embossed box shaped like a bar of gold. "I hope this gets your attention," he says.
Not exactly subtle, and a mistake. This panel knows that gold is down. And we're here to be sold on the business, not the metal. Downhill from here for Trench.
9:15 A.M.
I'm surprised by how few of the competing teams are presenting Web-based business concepts. I thought E-commerce was the buzz. GetOutdoors.com is our only one, and I don't think it's all that strong. The team is one of the youngest, five Gen-X guys, all in suits they don't exactly look comfortable in. Team leader Adam Meron, a standout with his MTV bleached-blond hair, explains that they plan a Web store where people planning a backpacking trip or a rock climb can get all the advice and equipment they need in one place.
A good idea on the surface, but the plan and the presentation lack detail. They talk about partnering with suppliers and with local climbing clubs all over the country, but they haven't yet formed any relationships. An investor would question why they didn't at least get a few letters of intent from manufacturers. It's as if these guys got together over pizza and beer one night and had a brainstorm: Hey, we like to climb and hike, and we like the Internet, so why not build a Web store for people just like us? Radical, dude.
I feel bad. They've worked on this for a year. But they still haven't done enough homework.
10:00 A.M.
We're halfway into the third pitch when I recognize a problem about potential investors: they won't necessarily tell you what they're thinking. The third team has the TV chair. The leader is Walter Albecker, a bookish Mr. Peepers type, down to the glasses. And the chair is right in front of us--a wood-frame, crate-style thing with no legs and a cushion that looks just like a futon. Two judges whisper the exact same remark: "If I ever came home with a thing like that, my wife would kill me...."
