Over the course of the last year I have been frequently invited to be part of the “panel of judges” to evaluate business plans written by aspiring entrepreneurs in popular “B Plan Competitions”. Though I have my own reservations on evaluations of b-plans based on a 30 min presentation – a competition is a competition! And of course there is got to be a winner and some losers. So we evaluate!
My point in this blog is not to comment on the B Plan competitions but to share my thoughts on the parameters that are being used to shortlist and evaluate winners. There is a fundamental flaw in design of these evaluation parameters in almost all cases.
Most often we are given a broad range of parameters to evaluate on, including but not limited to power of the idea, innovativeness, originality, presentation ability, financials, etc . Very often a disproportionate thrust is given to the originality and supposed “out-of-the-box” nature of the central idea. The winner in many cases would be the one who has an “interesting” idea that promises a fairly large impact on a societal issue. However most of these winning plans can be seen to have only one problem – that the customer is blissfully ignorant of the need for the solution. Some smarter group would have identified this as a risk and proposed mitigation as educating the market.
A business plan that is written for a fairly established opportunity using a sound approach that does not seem fancy but is assured of reasonable success often is relegated as good but not good enough, due to lack of imagination on the mind of the team cooking this up. Despite the strength of the financials, profitability and proven opportunity – these plans fail to excite.
Just take a step back and look at how many businesses that you know of which have become successful by creating a market against the number of businesses that have capitalized on gaps either on the market or industry side?
Please don’t understand me wrong! My intention is not to decry b-plan competitions, but to direct thinking towards getting more serious about evaluating the business viability rather than the innovativeness of the idea.
This requires a shift in thinking towards rewarding the person who has thought through the business well, rather than someone who has got on to a fantastic idea, which probably will never see the light of day as a business. A B Plan competition today borders more on creative pursuit than on stable business acumen (which is often common place knowledge, executed with conviction)
While these competitions do help foster a healthy interest amongst aspiring entrepreneurs and student community in taking up entrepreneurship – failure to use the right yard stick could mislead them into assuming business success is predicated on “creative quotient” of the idea and not “practical possibility” of opportunity exploitation.
I know many wise minds would say, finding fault and raising questions is the easiest part – it’s coming up with answers that are difficult and matter. Hence I will present my thoughts on what can be a set of parameters that can make a solid case for a business in a separate article.
In the meantime, I will continue to visit b-plan competitions as it gives me lot of questions and thoughts to ponder about. After all this is needed to fuel the grey cells and keep them sharpened.