How to Win a B-School Competition

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Take Andrew Smith, a second-year MBA student at the Tuck School of Businessat Dartmouth whose team won the Rice Business Plan Competition last year. He came into business school with seven years experience in the sustainable energy field and knew that he wanted to continue to pursue work in this field while in business school.

He teamed up with Keith White, a second-year MBA student at Tuck with experience in the trucking industry, and the two came up with a business plan for a company, Advanced Transit Dynamics, that uses rear-drag-reduction technology to improve the fuel efficiency of tractor trailers. "It helps if you are passionate about the issue starting up front," Smith said. "I went to these B-school competitions certain that this is what I wanted to do the next three to five years of my life."

It is this type of commitment to a project that many judges keep an eye out for, said Hadzima, of the MIT $100K competition. He often asks students what they plan to do after the competition. He uses this as a test to determine how passionate students are about their business plans. The answers can sometimes be telling, Hadzima said. "You want to get a sense of if the people are really committed to doing it," he said. "To say this is the winning team and then having them go nowhere with it is denying another team the opportunity to take it and run with it."

BE PREPARED. Judges of several major competitions agree that many competitors at business-plan competitions share a weakness: They are often unfamiliar with the market for their product. This can work to a team's disadvantage because judges for many of these competitions tend to be venture capitalists, people who will only throw their support behind a project if they feel it will get a strong market return.

At the Rice Business Plan Competition, 56% of the judges in this year's competition were venture capitalists or private equity and angel investors. Other similar competitions feature panels of judges that are exclusively venture capitalists. "I feel sometimes they discount it because it's obvious, but not being able to define the real market that you have for your product is a disadvantage," said Philana Diaz, director of the Rice competition.

Indeed, some recent winners of competitions said they conducted exhaustive research on potential consumers for their products. The SteriCoat team from MIT reached out to a cross-section of people in the hospital industry, from low-level employees to high-level medical device executives, to ascertain the market need for their product, which seeks to reduce hospital infections.As part of their business plan they listed 25 people in the industry they had consulted with, a move they felt would give validity to their company. "We wanted to find the nurse and doctor who dealt with our particular problem and we were able to do that," Lucchino said.

Dwork of GreenWare conducted similar market research when putting together his business plan, he said. He spoke to dozens of people in the food service and grocery industry to see if consumers would be interested in buying biodegradable plates. He also bounced the idea off his friends and practically anyone else who would listen to him. "It is important to validate it with other people and validate it within the market, actually go out and spend the time to see if there is any need," he said.

But sometimes even teams who have done the most diligent homework and research on their product will occasionally be stumped by a judge's question. If this occurs, don't panic, advises Keith White, a second-year Tuck Student who is a co-founder of the Advanced Transit Dynamics team. "Make the judges aware that you know what the weaknesses are," he says. "Even though you don't have a direct answer, don't gloss over it."

WINNING ISN'T EVERYTHING. There is still an upside to entering business-plan competitions, even if you don't manage to win one. Venture capitalists and other businessmen will often attend business-plan competitions just to observe some of the latest ideas and technology being pushed by students.

At the very least, the contests give students a chance to see if their plan actually has a chance of succeeding in the real world, said John Harthorne, a recent graduate from the MIT Sloan School and a member of the Robopsy team. He wrote five business plans for companies during his time in school. Some of the plans succeeded, while others did not. Writing them while in business school allowed him to test them out in a supportive setting, he said."It creates an environment where you can fail without cost," Harthorne said.

For those who do win business-school competitions, the experience can be a little heady. In addition to the seed money and the prestige, there are sometimes unexpected bonuses. The two winning teams from this year's MIT $100K competition were invited to ring the opening bell at the New York Stock Exchange on May 17, a promising start to their business careers.

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Damast is a reporter for BusinessWeek.com.