1. How to spark real student venture creation

    My friend Brad Hargreaves recently blogged about the weaknesses of business plan competitions.

    I’ve been waiting to give my thoughts on this as well and while Brad offers some interesting ideas, I don’t think business plan competitions need to be redesigned, they need to be done away with.

    First, why I know what I’m talking about: I’m recently on leave from NYU where I started the largest and only multi-disciplinary technology student group on campus called Tech@NYU. I work directly with NCIIA and 11 other student ambassadors from around the country on how to spark student venture creation. Finally, I get emails everyday from NYU students trying to form ventures and asking me questions on what to do next.

    Here are the three main problems (patterns I see) that students face:

    1. Finding the right teammates
    2. Having an easy way to get their question answered (mentoring)
    3. Wasting time thinking about their ideas instead of talking/selling to customers

    Business plan competitions don’t lend themselves to easy team formation because it’s difficult to get a group of people to commit to an entire year of working on something, especially if it’s their first time working with specific people. For teams that enter the competition, the first thing to go wrong will be the team dynamics and having a mismatch of commitment. New entrepreneurs need to get a lot of just-long-enough exposure to working with different teammates to find people that are both committed and a match for their skillset.

    In most competitions, the mentoring is an hour meeting with a mentor every couple of weeks. It’s asynchronous, transient, and the mentors aren’t a part of the action. Teams can only go as fast as they can get feedback, this structure prevents key momentum from being built. Mentor feedback should be both instantaneous and in person.

    Customer development and lean startup methodologies are slowly making their way into academic circles. Through my participation and conversations surrounding NYU’s business plan competition, it’s surprising how many teams go through the entire year-long process without talking to more than a few customers, if any. As they say, “a business plan never survives first contact with customers.” Customer development is not obvious, many people are afraid to put themselves out there, and as stated earlier students don’t even have the network for customers. These reasons are why customer development needs to be a focal point of student venture creation.

    *Now I’d like to propose a solution:

    Anyone involved in the startup community these days has participated in the new wave of hackathons and weekend-intense startup competitions. Notable ones including hackNY, Lean Startup Machine, and as recent as this weekend’s NYC Music Hack Day. In the academic world, Tina Seelig pioneered this format for learning-entrepreneurship-by-doing in her innovative classroom experiments at Stanford.

    Not only does this format solve the problems I mentioned above, but it also has other significant advantages:

    Greater participation: It’s magnitudes easier to get people from all walks to commit to a weekend instead of a year-long event. More students, more mentors, and more volunteers/supporters. People like instant results. At these type of events you can get participation from the celebrity entrepreneurs like Dennis Crowley and Jack Dorsey (both previous NYUers) who legitimately don’t have the time for a year-long process. You can repeat the process several times a year with the same effect and students will have the opportunity to work with more and different teammates at every event without need for serious commitment.

    Mentors are in the action: The mentors work with teams throughout the weekend and are there from beginning to end. They know what’s going on and they’re right there when teams fall on their face to help them get back up. They spend enough time together to build real bonds with participants.

    More efficient use of capital: These events cost between $5-10k to organize and can rally 50-200 participants. Teams average five people which means 10 to 40 projects can come out of a single weekend. 

    Focus on customer development: When it comes to Lean Startup Machine, it works because it takes the team and a kick in the butt from the mentors to get people out of the building. Especially for the developers that frequent our events, testing their assumptions and talking to a large number of customers is typically not a part of their skillset. It’s a natural reaction to want to think through things than dive-in head first when you know you’re idea isn’t going to survive first-contact. Through equating failure with learning, teams don’t rationalize their ideas, they’re free to completely revamp them in favor of better ones.

    Momentum drives results: These events actually take people out of their day-to-day routine and comfort zone, allowing them to produce greater results. How many teams come out of business plan competitions profitable? At our last Lean Startup Machine the second place team had $100 in escrow after just 48 hours. This momentum is an even stronger encouragement for teams to continue after the event.

    If schools really want to spark student innovation and venture creation, put the $100k+ and effort that goes into the one-track year-long competition into 10 of these weekend-intense competitions and offer the winners free co-working space in proximity to mentors and other entrepreneurs. The students will do the rest.

    Next week I’ll be at the Future of Entrepreneurship Education Summit organized by my friend Michael Simmons. I’ll be presenting the mechanics behind Lean Startup Machine to the heads of the Coleman Foundation, NFTE, and CEO, among others. We hope to make Lean Startup Machine a platform for schools and communities to easily host these events on their own to spark venture creation. This may seem like a radical change, but given my reasoning above, I hope you’ll agree it’s a no brainer.

    Feedback, critique, and criticism welcome.

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    You can check out Eric Ries’s thoughts on Lean Startup Machine here.

    2. 1 year ago 

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