After reporting reporting last month that Israeli startup Panoramic Power won the inaugural QPrize, the incentive prize organized by Qualcomm Ventures, I recently got a chance to discuss the outcome with Nagraj Kashyap, vice president of Qualcomm Ventures. He says the San Diego wireless industry giant intends to organize a second round of its business plan competition—but plans to de-emphasize both the business plan and the competition.
While Qualcomm Ventures cast the first QPrize as a competitive program among wireless industry startups from around the world, Kashyap says “competition” was conjuring the wrong implications for too many contenders. Rather than a business plan competition in which teams were competing on the basis of a PowerPoint slide deck, Kashyap says, “these were real companies with real products” and some considered the notion of choosing winners and losers unappealing.
“In this case,” Kashyap says, “we ended up funding four companies—one global winner and three regional winners. As a result, Kashyap says the next incentive prize event will likely be described as more of an early stage venture funding program.
Qualcomm hosted Panoramic Power, which has developed wireless sensors that companies and other organizations can use to create “smart grid” technologies within their existing facilities, and the other three finalists at its Q Prize finals in San Diego on November 3. Each finalist made a presentation at the annual QC Ventures CEO Summit, the wireless technology giant’s invitation-only event for roughly 200 VC partners, wireless industry VIPs, Qualcomm managers, and CEOs of Qualcomm Ventures’ portfolio companies.
“We considered the event a success,” Kashyap says. “Four very promising startups got funding from us… a lot of the finalists got a tremendous amount of PR from the press in their respective regions.” (This seems a bit paradoxical to me, since Qualcomm did not open its CEO summit or the QPrize finalists’ presentations to the media.)
Kashyap says another sign of success is that one of the four winners, which he would not identify, has closed on a Series A round of venture funding—and two others got unsolicited inquiries from angel investors and small VCs that he characterized as “very strong commitments for future funding.”
The overall global incentive prize program was successful enough for Qualcomm Ventures to do it again—although Kashyap says the timing, format, and logistics required for a second round have yet to be determined. “We’ve been approached by some VCs who asked if we can do this together,” Kashyap says. Many details remain to be worked out, including specifics about the best way to reframe the QPrize as a global, early stage funding program for existing startups instead of a business plan competition.
But Kashyap adds that while the QPrize solicitation will definitely start in 2010, the logistics of running a global prize competition make it likely the final round would not be held until 2011. “We found lots of regional differences,” Kashyap says. For example, “Europe sort of shuts down for a couple of months of the summer,” making it hard to make much progress.
Each of the four finalists in the first round of the competition received $100,000 in convertible note financing (a note that converts to preferred shares if the startup gets equity financing), with Panoramic Power getting an additional $150,000 as the grand prize winner. The other finalists are:
—CooTek, a startup in China that has developed a user interface for touchscreen mobile devices that uses “prediction engine” software that helps the user contextually determine word sequences.
—Capillary Technologies, a startup in India pioneering a platform for customer relationship management marketing services. Capillary has deployed its products in more than 400 stores in 75 cities throughout India.
—txt.eagle, a startup based in San Francisco and Kenya, that has developed a crowd sourcing platform that enables mobile phone subscribers to earn small amounts of money or additional minutes of mobile phone service by doing tasks, such as translation and image tagging to market research surveys, for corporate clients.
