I recently read about Buffalo's new business plan competition to try and spur entrepreneurship in the area. It's called 43North and is offering $5 million in total prizes to businesses and a $1 million grand prize. With every municipality east of Silicon Valley undertaking "entrepreneurship initiatives," I'm usually a little skeptical, because they often seem to lack a real system in place and are just trying to capitalize on buzz; a city can launch as many Incubators as they want, but without a network of support, access to funding or mentors, and a community united behind the project, those spaces fail to really spur any true change in an area.
However, after thinking about Buffalo's initiative some more, I think it's a really good idea. And that's coming from personal experience.
My partners and I launched NMC while still in college, and the motivating factor for the company was the Carolina Challenge, a business plan competition sponsored by UNC. We were lucky enough to win that competition and take home the $12,500 prize (essentially $1 million to a college student). I think I can safely say that without the Carolina Challenge, NMC wouldn't exist; however, interestingly, I do think it would exist even if we hadn't won the competition.
That's the beauty of business plan competitions -- they dangle a carrot in front of you that encourages you to do a lot of the hard work up front. We had to spend a lot of time thinking about what we wanted to do, writing our business plan (which quickly got pitched out the window after a few months in business), validating that to judges, and making connections in the local business community as we traversed the competition. All of those things had to happen before we won or lost, and I distinctly remember all of us agreeing to act on our idea regardless of the final outcome, because of all the work we had already put in and the value we saw in it.
Someone getting cheap space at an incubator doesn't necessarily have to go through all those steps, and it makes them less likely to be fully bought in when times get tough (and they will).
And how did that investment from the community turn out? NMC is now 8 years old, employing a dozen people in the area, helping the local tax base, and contributing to the community in many ways (including fun windows). We're not Google or Facebook, but I'd say it worked out well for that relatively small investment, and we've also tried to pay it back to UNC by helping with the competition and speaking to entrepreneurship classes on campus.
There are definitely plenty of ways to spur entrepreneurship in an area and many are cheaper than $5 million, but I really respect what Buffalo is doing and it seems to be outside the box of what most communities are trying (incubators, pitch days, etc.). It wouldn't surprise me if one of the biggest successes to ultimately come out of the process is someone who doesn't win the grand prize. I'm excited to see where this goes!
And your reward for reading this whole post is getting to see what we looked like when we won that competition 8 short years ago (get a haircut, bro)...