awarded prizes, all in the matter of a few days or weeks.
“We created a crazy, insane system that turned the competition into a four-month process. I compare the format to an extended March Madness,” Faley says.
In Round One, students articulate the problem that needs solving, who their potential customers are, a solution to the problem, and how their idea will make money. In Round Two, they perform market analyses. Round Three is the classic pitch round. Round Four has the final four teams sitting down with investors.
“The investors give the students three minutes of uninterrupted pitch time, but then they’ll jump in and ask anything,” Faley says. Throughout all rounds, members of teams who are eliminated are encouraged to re-combine with successful teams.
Faley says winning teams are not only introduced to venture capitalists, but they’re sent on the road to compete in business plan competitions across the nation, which allows them to refine their business plans as well as expose them to an array of investors outside of Michigan.
Although the prize money is welcome, Faley says students routinely tell him that the feedback they get is the most valuable part of the experience.
He cites one student project, Mobius Microsystems, which racked up $200,000 in prize money while traveling on the business competition circuit. The students used the $200,000 as pre-seed money. Venture capitalists contributed more, and Faley, speaking like a proud papa, says that in 2010 Mobius was acquired by Integrated Device Technology.
Faley points to Mobius as proof that the entrepreneurial climate in Michigan right now is much better than it was even a few years ago. He says it’s now a legitimate career option for students, as these entrepreneurial programs are “exploding” nationally, to take a few years off after graduation to try their hand at starting a company. The only hindrance he sees is Midwesterners’ tendency to look at entrepreneurial failure with shame and quit, whereas in Silicon Valley, failure is seen as a badge of honor one acquires, sometimes more than once, along the path to success. Faley says he’s working to overcome the seemingly inborn Midwestern inferiority complex.
“Eight years ago, with the Big Three, it used to be the students’ perspective that you either start a company or join Ford, GM or Chrysler and have a 30-year career. That’s no longer true. And if you’ve been involved in [business plan competitions] and exposed to so much, you’ve really expanded your knowledge base for the next opportunity. The risk playing field has really been leveled.”
