The dilemma of participating in business competitions, the double edge sword!
At first glance, business competitions are a huge validation for startups and their technologies. They create the appearance of objectivity by selecting the best startups out of a pool of 300 or more to compete. So just being among the top 10 or 20 finalists means you are elite and your company is already a winner.
The reality is that there is only one winner. Everybody is looking at the first prize. Even when everything is equal, the chances of being the winner is very low (5–10%) for any given startup out of 10–20 finalists. This brings us to the downside of business competitions. Business competitions create losers out of winners.
The final decisions are NOT objective, particularly when there is a cash prize or investment involved. Just imagine yourself in the shoes of a judge deciding which startup should get $1 Million based on a 10 minute pitch and 10 minutes of question and answer. Now you are getting the picture. The winners are chosen long before the pitch competition day. You need to have a really strong network that supports you to win one of the business competitions.
Even though your company is one of the best companies that applied, the committee has to find something wrong with your business to justify giving the award to the winner. It is easy to convince a committee not to fund a startup. It can come down to one person disagreeing with your answer to a single question. Then you have a powerful group of people that believe your company’s business plan is not good enough. Long after the competition is over, they will tell their network that your company was not good enough without remembering that they actually selected your company to be a finalist from 300 companies or more.
Money takes the competition to a new level; the war zone. The finalists start playing dirty. In one recent business competition, a finalist told a designer that reached out to all of the finalists that she couldn’t work with us after signing with them. We laughed it off and hired someone else, but it left a bad taste in our mouth.