Mark Cuban: Where are you?
# 1. Both rely on the instinct of the judge rather than an unbiased measure of performance.
Business plan contests, or pitch contests, for those who don’t want to waste their time reading a full business plan, is one of the most popular entrepreneurship activities in many business schools, universities, incubators, and communities. The latest incarnation of this phenomenon is the shark tank type competition. The judges use their “superior” instincts to decide whether a particular plan or pitch is attractive.
The same goes for beauty pageants. The judges use instinct to choose a winner from among attractive participants.
# 2. The baits are very similar.
The appeal of business plan competitions is that they promote the corporate image and publicize the winners and sponsors, usually universities, business schools, banks, and business development agencies, who want to do something productive in the development of corporate projects. The entrepreneurs make connections and potentially receive funding. And the banks and service companies get customers and customers.
The same goes for beauty pageants. Beauty pageants promote the appearance of the participants and introduce the participants and sponsors – usually promoters, beauty product companies, and media.
# 3. Both are superficial.
Business plan competition judges will tell you that they are evaluating a company’s potential. Judges need to be really talented if they can pick winners at the start-up stage (with the exception of selecting the medical company that has developed a cancer cure) as VCs wait for aha, i.e. real proof of potential, before investing. What exactly do judges judge in business plan competitions? Beauty? Looks? Perceptions? Fortunately, they don’t let entrepreneurs strut in bathing suits.
The same goes for beauty pageants. Beauty pageants value superficial beauty. There is a question where you can show your compassion for the poor and the oppressed and a talent contest where participants need to demonstrate that they have real expertise. True, but you have no chance of showing your compassion and talent if you don’t pass the pattern in a bathing suit.
# 4. Neither is an accurate predictor of future success.
Business plan contest winners are not guaranteed to be successful. Many things can go wrong between a business plan and a successful business. It’s called risk, which is why most professional VCs wait for real evidence, not superficial evidence based on the opinions of some judges. Yet VCs fail in 80% of the ventures they finance.
The same goes for beauty pageants. Winning a beauty pageant does not guarantee great achievements in life. Yes, some winners succeed. In the world we live in – appearance and color matter, but should they matter?
What better approach for entrepreneurs?
Is the proportion of false positives and false negatives in a business plan competition worth the investment? When this problem was raised by sponsors or supporters of business plan competitions, the response was great. Is that all that matters This way, public curtains also generate a lot of advertising. Is that what corporate development has focused on?
Moving to a results-based approach rather than a swimsuit competition means the judges are judging real results, not hopes, dreams and shapes. Winners can be selected from all races, genders, and socio-economic and educational backgrounds, as the results can be quantified and ranked. Most importantly, this approach can create sustainable jobs and economic growth rather than false hopes for desires and distorted intentions.
MY TAKE: Can we put the resources devoted to business plan competitions into training entrepreneurs in the skills and strategies of unicorn entrepreneurs? Can we offer entrepreneurs starting with limited capital and proven expertise more resources and “prices” than entrepreneurs with the right pedigree, education, or social standing? This can channel resources to those who can offer real returns instead of PR.
And judges should be encouraged to invest significant amounts of their own capital in the companies they select as winners. This could put an end to the beauty pageant in the entrepreneurial industry. Shark Tank should come out of the closet and reveal whether judges carefully examined the products they so casually finance on television or subsequently invested carelessly in the ventures they claim to love. Mark Cuban where are you