A Tale of Two Cash Prizes
A while back we started to get involved in helping to put on one of the many startup competitions that happen at US colleges and universities. When examining other competitions of similar or greater size we discovered a common story among participants and winners. The following scenarios are real examples of different outcomes from those competitions.
Scenario A
An university has a business plan competition for students. The target demographic of the university is students who attend their business school. These students spend a semester or more putting together a large business plan that is mostly theoretical in an effort to prove that a business idea will work to a team of judges.
Of all of the students who compete, a team of business school students with an idea for a SaaS (Software as a Service) product wins the competition. The grand prize is $50,000.
In an effort to make their business a reality, these students go out and hire a top software development firm to bring their product to life. The software development firm happily complies by sticking a $45,000 price tag on the build, which these students happily pay.
At the end of the project the students have a wonderful new product that they are ready to go to market with. It promptly flops due to lack of customer validation and the students don’t have enough money left after blowing over half of their winnings on the initial build of the product and spending the other $5,000 on pizza and beer….A LOT of pizza and beer.
Scenario B
Another university has a hack-a-thon for students. This competition is geared toward students from the computer science department. The idea is to spend a weekend coding/programming/developing a working example of some piece of software or technology.
The students who win end up building a brilliant piece of technology that is exciting, fun, and has very high potential to solve real world issues. They end up receiving $5,000 in cash as their prize.
When asked what they will spend their $5,000 on, the students shrug and say, “Well, we already built the tech…so I guess we’ll spend it on pizza and beer.” They go on to do exactly that, promptly letting a beautiful idea that actually could have helped people die in the gutter of Idea Street.
Conclusion
A successful business idea doesn’t have a great shot at growing out of a theoretical plan or a weekend of hacking. It comes out of a mix of deep passion, knowledge, and obsession combined with customer validation and user testing. Don’t let your idea die in a scenario that includes premature purchase of pizza and beer.
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Alex Sejdinaj is a cofounder of South Bend Code School, GiveGrove, and Code Works. He loves building cool stuff that helps people.
