Melissa Korn of the Wall Street Journal published an enlightening article called "Entrepreneur Contests Take Practical Turn," about entrepreneurship contests at business school and about different models being pioneered. She explored three different competition models: (1) Babson: pitching and taking steps to launch a business; (2) Darden: case-based entrepreneurial learning; and (3) Rice: investments in winning companies. In exploring these three competition models, it is unclear whether any one model better addresses the problem Korn highlights at the beginning of her story: "most of the business plans that emerge from these competitions never become full-fledged businesses." One potential reason could be, as Korn points out in the case of the Babson and Rice models, that business plans are just plans, not actual businesses. Clearly, this is problematic.
This year the MIT $100K Entrepreneurship Competition, the largest student-run entrepreneurship competition in the U.S., launched a new contest to address this precise problem. The mission of the new contest, called ACCELERATE, is for teams to build demos of their idea, whether that be a hardware prototype, a beta service, or experimental data for a promising new drug. In other words, the contest forces teams to go beyond just creating plans and translate their ideas into actual products or services. We believe this model is the best way to encourage the founding of real, viable businesses. As a part of the contest, one team traveled to Sierra Leone to test their idea of renting out solar lamps in rural communities. They ran a pilot on the ground and found that local communities were overwhelmingly enthusiastic about their service. Another team launched a beta version of a mobile shopping solution with several local business partners. All of the 28 teams in the contest, spanning such diverse sectors as life sciences to mobile to energy, ventured out of the classroom to test, refine, and even launch their businesses.
The results of the ACCELERATE Contest will not be conclusive after one year or even after two, but we hope that after several years we will see that this contest and its sister and subsequent contest, the Business Plan Contest (BPC), will launch more businesses than before. In the last 10 years, every company that has won the MIT $100K's flagship contest, the BPC, has actually started a business, a figure higher than the national statistic and higher than those of the peer contests referenced in the article.
The MIT $100K Entrepreneurship Competition started 22 years ago and has generated more than 160 companies that have raised over $1.3B in venture capital funding, amassed a market cap of over $15B, resulted in over 30 major acquisitions, and created over 4,000 jobs. The ACCELERATE Contest will end on February 22nd with a Demo Day at the MIT Media Lab. The deadline to enter the BPC is March 16, 2012. For more information, please visit www.mit100k.org.
This article was written by Adam Borelli and Alice Francis, Managing Directors, and Dennis Jiang and Andrea Ippolito, ACCELERATE Directors.