The Small Engines team just got back from an exciting business plan competition called the Elevator Competition at the Wake Forest Business School in the town of Winston-Salem, North Carolina.
The setup:
· Two rounds of an elevator pitch up 27 floors of the tallest building in the city. That’s right…we actually are in an elevator (check videos of last year’s competition) with a social investor and pitch our idea and business to them within 2 minutes. There’s a timekeeper that monitors the 2 minutes. And no…it’s not a straight elevator ride. We go up 16 floors, walk across the hall to another set of elevators that then goes up to the 27th floor. In this much time, you could also get interrupted for questions, which happened to us in the first round. On the second time up, a local television crew accompanied us.
· If you do well on the elevator rounds, you are then invited to the final 20-minute presentation round. Only 5 teams out of the 14 in the social category of the competition (which we were part of) are invited. We got in and then made our 20-minute presentation. We even passed around our prototype, which got everyone’s curiosity up and started a barrage of questions. The judges really started nailing us on the prototype/product. “What is the price point?” “If you sell it for $150, how can the farmer afford it?” “Why diesel?” “What is your manufacturing strategy?” “If you are going to license the technology and distribute it using IDE’s network, what are your margins like?” “What are the added costs for the farmer in order to change over to your product; hence what will be the total costs of the product to the farmer on top of the $150 for the engine?” “Is this a sustainable solution or model in the long-term?” Excellent questions!! We had answers for a number of these questions but we also left some questions unanswered since we are expecting our summer trip to provide us with answers to these questions. One of the judges advised us to in fact humor the judges next time and give them at least one scenario even though we don’t know if that will be the strategy we adopt in the future. Good point!!
In the end the judges were left with making a decision over who should be the ideal team to fund. The decision was over two distinctive points among the teams, early-stage vs. later-stage. We represented early-stage teams while Bonseye Guides represent later-stage teams who had a working product and an initial market test to show. The decision also boiled down to “should we fund teams that show large social impacts in the long-term or teams that seem to be more financially sustainable in the long-term?” We lost on both counts as per judge’s comments. They went with the team that had a proof-of-market and showed financial sustainability.
These glaring differences in such competitions are key aspects that make a strong team, a winning team. This experience definitely taught us how to improve our idea and further strengthen our business plan.
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