More than eight hundred people crowd BYU’s Joseph Smith Auditorium on a spring afternoon—some anxious, others curious. With the mix of chatter and upbeat music filling the room, a pep rally may seem imminent, but this gathering is a bit more cerebral in nature.
Just a few minutes after 2 p.m., BYU’s 2005 Business Plan Competition begins. The three final teams, who have trumped sixty-two other student teams, each have ten minutes to present their business plan and woo judges one last time.
The event, sponsored by the Marriott School’s Center for Entrepreneurship, has grown since its inception in 1993 to become one of the largest and most prestigious collegiate competitions in the county. More than $100,000 in cash and in-kind services are awarded to students each year. By demanding extensive preparation, the competition has helped facilitate the launch of a number of successful entrepreneurial ventures, including 2005 Business Plan Competition winner Alianza.
This spring afternoon event is not just a contest—it’s the culmination of planning, risking, mentoring, judging, imagining, and, in some cases, taking out second mortgages. These student dreamers are not only interested in creating a successful company from scratch. They also focus outward, helping consumers and businesses become more effective.
Don Livingstone, director of the Center for Entrepreneurship, explains that the practical experience students gain by participating in the competition is the best kind. “Having the entrants think through the process of starting an actual company—how am I going to get money, how am I going to make my product, how am I going to sell it, and what people do I need?” Livingstone says, “That’s education at its finest because it’s bridging the gap from the theoretical to the practical.”
COMPETITION’S PREPARATION
Under the direction of Gary Williams, the BPC’s faculty advisor, twenty-some twenty-somethings—first and second-year MBA students—take control of the competition’s planning and execution.
Dave Smith served as student director for the 2005 Business Plan Competition and believes it is one of the best activities an MBA student can get involved in. “It’s an educational opportunity as well as a competition,” he says. “We try to meld those together as much as possible. The volunteers oversee everything—the marketing, organization, and planning—that goes along with it.”
The competition involves more than the final presentations in front of hundreds. Volunteers host kickoff events, arrange learning seminars, and organize the judging, as well as throw T-shirts to the audience and give away door prizes at the final event. The BPC is an educational experience for the volunteers just as much as it is for students who enter a plan. “I probably learned as much about leadership and management as I did in my MBA classes,” says Smith, who now works at Ford. “You can’t find that anywhere else in an academic setting.”
This year, MBA students enrolled in the venture capital private equity class were partnered with the finalist teams. They completed a review of each start-up to pinpoint their weak spots. This perspective was particularly helpful for student teams from outside the Marriott School.
The competition hasn’t always had such a strong emphasis—and dependence—on student volunteers. In fall 2001 Williams overhauled the then eight-year-old program, gleaning new ideas from other successful competitions. “We set out four goals at that point,” he recalls. “We wanted a year-long competition, not just a single event held during winter semester. We wanted to have a student-run competition. We wanted more involvement at the university level, and we wanted more involvement with outside professionals.”
The competition has evolved to meet those goals and become a more intense experience. Participants go through three rounds of judging before a winner is named. Sixty-five plans were entered in the 2004–2005 competition and evaluated by experienced angel investors, entrepreneurs, and associates from venture capital firms. The judges donate their time—about a full work day—to read through the plans and pick ten semifinalists.
Semifinalists then give a ten-minute presentation and field questions from the judges, who are directors of venture capital firms, partners from private equity firms, attorneys, and accountants. This group, who represent nearly $5 billion in assets under management, select the final three companies to present at the competition’s final event.
“There’s an excitement and energy you feel from the students in the presentation,” remarks John Simcox, a BPC judge and chair of the Entrepreneur Founders’ board of directors. “The quality of the presentations and plans continues to amaze us. It’s exciting to see the success the students take from this experience into the world.”
2005 COMPETITION WINNERS
For Livingstone, watching the competition expand across campus is thrilling. “About 50 percent of the participants this year came from outside the Marriott School, which is really exciting because it shows that we are getting entrepreneurship all across campus,” he says.
The winning business, Alianza, illustrates that statistic. The company is run by CEO Brian Beutler, a history major from Orem, Utah, and Scott Bell, the chief technology officer, an accounting major from Orem, Utah.
Alianza, which offers telephone services to Mexican businesses using Voice over Internet Protocol, is going head-to-head with Mexico’s dominant phone company, TelMex. But in this David-and-Goliath battle, Alianza is using the web instead of a slingshot. By routing calls through the Internet, Alianza saves its customers 50–90 percent on monthly phone bills. And while the business is gaining customers—adding about 30 percent each month—TelMex has said it doesn’t plan to touch Voice over Internet Protocol in the next three years.
“Our customers tell us how much it’s saving them. They now have a choice; they have a valuable alternative for the first time—that’s exciting, and that’s what gets us going,” says Beutler, who walked away from the final presentation with $29,000 in cash and another $30,000 in start-up services such as legal and accounting assistance.
“Winning still seems like a dream,” adds Bell. “It has been a huge validation for us, our employees, as well as potential investors. Before the competition we thought we had a pretty good thing going; now people with much more business experience think we’ve got a great thing going.”
The venture developed from a telecomm company owned by Beutler’s dad. After working as the sales and marketing vice president, Beutler took over the company when his dad retired. Although the company was doing well, the U. S. telephone market was stagnant, leaving Beutler to look for ways he could develop new opportunities. “We knew that Voice over Internet Protocol technology had the potential to change the way people across the world communicate, and nowhere was this more evident than in Latin America,” he says.
Beutler’s dad provided the seed capital, but it quickly became evident the opportunity would require much more money than Alianza had, so Bell and Beutler wrote a business plan to present to potential investors. “During this process we heard about the BYU competition,” Bell recalls. “We thought it would be a good way to get the word out and so we entered.”
Since winning the BPC, Alianza has been able to secure more than $2 million in funding. “The competition has made a huge difference. Because of the contacts we made through the competition, we have been able to get the funding that we were looking for,” Bell explains.
For Beutler, having responsibility for Alianza is satisfying. “I love being in a start-up business—watching the company grow and seeing the results of our work,” Beutler says. “I like the risks, and I like the rewards. It’s very gratifying to know that at the end of the day what I do directly impacts the success or failure of the business.”
Alianza’s outreach is typical of the competition’s scope. “We’re getting just amazingly different plans, and they’re not just centered in Utah Valley—they’re in Mexico, Southern California, and nationwide. It’s really phenomenal,” Livingstone says.
The companies that snagged second and third place at the 2005 competition, PICS Auditing and Informera, are on their way to becoming part of the national market. PICS Auditing, which came in second, supplies businesses with information they need to hire contractors who meet government and industry safety standards; it won $30,000 in cash and in-kind services.
Informera took third and earned $20,000 in cash and in-kind services. The company sells ad space in restaurant waiting areas on plasma televisions that display waiting lists, sports updates, news stories, trivia, and restaurant features.
AFTER THE COMPETITION
The Business Plan Competition has helped jumpstart a number of successful companies that have done well both in the business world and at other competitions.
For Jonathan Coon, the BPC helped turn his small contact lens business into the multimillion-dollar company 1-800-CONTACTS. He won the BPC in 1995 while pursuing his MBA degree. “This competition forces participants to put their ideas into a plan,” he says. “It’s a great experience for all entrants; they’re more likely to do something with their ideas once they’re on paper.”
1-800 CONTACTS is now the world’s largest contacts store, filling orders for more than five million customers. “I’m doing what I love and having fun,” says Coon, who announced the winners at the 2005 competition. “I can’t consider this a job.”
The BYU BPC is also becoming a springboard for other competitions. Winning the 2003 BPC was just the beginning for David Bateman. His business, Property Solutions International, Inc., went on to compete against MBAs from around the country at Fortune Small Business magazine’s first business plan competition later that year. And although he and his business partners were only undergraduates, they beat fifty-eight MBA teams from across the county to win the $50,000 cash award.
Property Solutions came out on top again in 2004 when they won $250,000 in funding from the National Institute for Entrepreneurship’s Venture Bowl, the nation’s largest college business plan competition; more than three hundred teams from national graduate and doctoral programs competed. “Winning the competitions gave us confidence that other people believed in our idea. It gave us a lot of publicity and introduced us to investors and vendors,” Bateman says.
One month after winning BYU’s competition, Alianza, also an undergraduate team, attended the Global MOOT CORP Competition in Austin, Texas. Forty teams of MBA students competed from top schools around the world, and Alianza placed in the top eight and earned its division’s Outstanding Business Plan Award.
“The fact that we can compete on that level, undergrads versus MBAs, says a lot for our students,” says Melinda Maughan, program assistant for the Center for Entrepreneurship.
“Our students are incredible presenters; some of that can be attributed to mission experience. Our academic programs are strong, and the BYU competition is probably one of the best in the country at prepping students and developing their business plan writing and presentation skills,” Williams says.
Business Plan Competition winners form a distinguished group—many go on to do great things and together they support one another. “Winners of past competitions have bent over backwards to help me build my business. They’ve helped me find investors; they’ve gone out of their way to meet with me and help me solve problems,” Bateman explains. “It’s really cool to see the people who benefit from the Business Plan Competition turn around and give back.”
The support competitors receive makes a lasting impression. “One of the greatest lessons we learned was that we have been extremely blessed by BYU alumni giving back to the school,” Bell says. “We have an obligation to give back to BYU what we have been given—guidance, friendship, advice, and mentoring from people we trust and share values with.”
A VALIDATING EXPERIENCE
“Probably the biggest effect has been enabling us to network with the right people,” Beutler explains. “Before the competition, people didn’t always take Alianza seriously because they look at me, a twenty-five-year-old, starting an international corporation, who’s looking for millions of dollars, and they wonder if it’s credible.”
The competition helps fulfill the Center for Entrepreneurship’s goal of encouraging students to start businesses. “As more and more students enroll in entrepreneurship classes and get competition exposure, they get a vision of what can be,” Livingstone says. “If we help launch twenty-five companies a year, it’s a great thing. Our primary focus is helping students.”
“Helping students intrinsically makes the school better because the better students you have coming out of the school the better the school will get,” Beutler says. “The best way it helps us is by opening our eyes, helping us realize our own potential.”
“A lot of the students who make it into the semifinal round, continue with their business even if they don’t make it to the finals,” Maughan says. “They learn how to give better presentations and how to answer questions from investors, so it prepares them for real-world experience.”
The competition also strengthens the school’s entrepreneurship program. In the April 2005 Entrepreneur magazine, BYU appears in the top thirteen regional programs in the country.
Being an entrepreneur is a lifestyle Livingstone readily endorses, and that’s why he and the Center for Entrepreneurship promote the Business Plan Competition and create opportunities for students to learn. “Wonderful things can happen,” Livingstone says. “You can have financial and job security that isn’t dependent on the fortunes of a large employer. Because successful entrepreneurs have a great deal of confidence, they aren’t going to get rocked by reverses. Every entrepreneur has reverses somewhere along the trail, but they don’t let that deter them from their goals.”
With the proven success the BPC has garnered on the national stage and in creating new companies, BYU’s competition will continue to launch new ideas. “We have a very legitimate process,” Williams says. “The students are mentored well through the writing, judging, and presenting process. All of it combines as kind of the secret sauce that makes it work for us.”
COMPETITIONS REAP SWEET REWARDS
Wife, mother, and graduate student Kelly Anderson knows that it takes more than a magic wand to launch a business. But with a strong idea, a little mentoring, and some royal opportunities, she’s transformed herself into an entrepreneur.
Anderson is in the process of creating Princess Sweet, a retail experience store with a princess theme, similar to Build-a-Bear stores. Her business plan has excelled in a number of competitions. Early last April she attended the Babcock Elevator Pitch Competition at Wake Forest University in North Carolina. Seventy MBA teams from across the nation applied for the competition and twenty-five were selected to compete in the semifinals.
At the competition, participants had two minutes to present their plans to venture capitalists while in an elevator as it ascended twenty-eight floors. The competition also included a twenty-minute presentation. Anderson’s compelling pitch and proposal was named—make that crowned—the second-place winner.
“Before this experience I don’t think I would have considered myself an entrepreneur,” says Anderson, who also placed 12th out of 160 teams at a business plan competition hosted by Rice University. “I do have a nonprofit organization for Bulgarian orphans, but a nonprofit is so different from a commercial business. Raising money for orphans is a little bit easier.”
When Anderson started formulating the idea for Princess Sweet, she approached the Center for Entrepreneurship and was advised to write a business plan. “It sounded so hard and scary,” she recalls. Despite her fears, Anderson created a two-page pitch and won third place in the BYU Elevator Pitch Competition. Encouraged to keep writing, she drafted a full business plan in two days and was a top-ten finalist at this year’s BYU Business Plan Competition.
“I would encourage people who have an idea to attend the Center for Entrepreneurship’s activities; there are great lectures and contests, and being around that energy helps you realize, ‘I can do this,’” Anderson says. “You know what you need to do long term, but you usually don’t know what your next step is.”
As a mom to a five-year-old boy and a one-year-old girl, Anderson looks to her kids for inspiration. “My children give me ideas and are excited about my store and want to be a part of it,” she says.
Anderson says Princess Sweet will help kids pretend, a concept she’s studied while a theatre and media arts graduate student. Her thesis research suggests the more children pretend, the more creative they’ll be. Pretending contributes to their creative thought, reading, writing, and problem-solving ability, she says.
Through her experiences, Anderson has gained confidence in her business concept. “I know my plan is now worthy to show an angel investor,” she says. “Some people enter only for the money, but this is my heart and soul, and the competition helped me refine my ideas and strengthen the concept.”
Anderson’s magic isn’t going to end at midnight or anytime soon. Amid wrapping up her thesis, Anderson is tracking down investors to turn Princess Sweet into a reality. She hopes to open her first store six months after finalizing funding.
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Article written by Emily Smurthwaite
Photos by Bradley Slade
