MI vs SF: The Art Of The Business Plan Competition
SAN FRANCISCO - In Silicon Valley, clothes don't make the man, they make the business plan competition.
Case in point, the Founder Showcase
. The dress code consists of designer jeans, sneakers, hair gel, suit coat and an untucked dress shirt with more buttons undone than not. A dress shirt, slacks and dress shoes garners a cocked eyebrow and a look that says, did your mother dress you in that? Counter point: the Accelerate Michigan Innovation Competition
in Ypsilanti. Here the dress code mandates suit, tie, wingtips and the gene for male-pattern baldness. A dress shirt, sweater, crisp jeans and sneakers receives a cross-eye and look of, didn't your mother teach you how to dress yourself?
Needless to say, there were women present at both events (including $500K winner DeNovo Science's
CEO and co-founder, Priyadarshini Gogoi
) but the male-to-female ratio was easily three-to-one.
These two business plan competitions not only represent the regions and economies they call home, but have some valuable lessons each entrepreneurial ecosystem needs to study. Where the Founder Showcase maximizes the hype and atmosphere of the event to cater to its audience (something only Dan Gilbert's business empire has mastered in Michigan), Accelerate Michigan excels with the substance and downright seriousness of its stakes and start-ups.
"I want people to understand that this is the big leagues," says Lauren Bigelow
, executive director of Accelerate Michigan. "These pitches are going to be heard by Masdar
from Abu Dhabi. They're not pitching the guy on the corner."
All about the start-ups
Conventional wisdom dictates that Silicon Valley
start-ups are superior to similar businesses in other cities. Comparing Metro Detroit's economy to the Bay Area's over the last decade won't do much to disprove that perception. That doesn't bode well for Accelerate Michigan, the annual $1 million business plan competition launched last year with the intent of showcasing the cream of the Great Lakes State's crop of start-ups. At least in comparison to the Founder Showcase, a similar business plan competition that has graced the pages of The New York Times
Don't put too much faith into that conventional wisdom.
Founder Showcase, which is held quarterly, receives more than 100 applications from early stage tech start-ups. That number is whittled down to 10 entrepreneurs who pitch a panel of judges made up of venture capitalists and angel investors. First place receives $2,500. Accelerate Michigan, an annual competition, attracted more than 300 applicants this fall, of which 53 made it to the semifinals to pitch to a panel of judges who are venture capitalists and angel investors. Even though the Accelerate Michigan contestants are mainly Michigan-based firms and vice-versa with Founder Showcase, the top tier of Accelerate Michigan start-ups, from my perspective, were superior to what I saw at Founder Showcase in early November.
Of course, opinions are subjective, but given the number of start-ups and entrepreneurs I've spoken to
over the last few years, I feel pretty comfortable comparing Michigan apples to California oranges (they grow oranges in California, don't they?). There aren't a lot of measurables for early stage start-ups, which makes investing in them more about professional intuition than hard statistics. With that said, I'd be more willing to put what little money I have into start-ups like Detroit-based Are You A Human
(Accelerate Michigan's student winner that is reinventing CAPTCHA
squiggly letters) or Ann Arbor-based OcuSciences
(Accelerate Michigan's life sciences award winner that is developing early detection technology for diabetes) than Neo
, a car-financing start-up for first-time car buyers that won the grand prize at the last Founder Showcase.
That's not meant to undersell Neo's potential
. The relatively new firm has a strong and innovative business plan based on exploiting an underserved section of the automotive financing market, recent college grads with higher GPAs than FICO scores. But it's not as far along or as helmed by executive leadership as, say, Ann Arbor-based logistics firm LLamasoft
In fairness, Neo isn't a venture-backed start-up like Are You A Human or a University of Michigan spin-out like OcuSciences, nor does it have the millions in revenue and national customer base that LLamasoft
has built over the last decade. But frankly, Silicon Valley's reputation alone made me think the roles would be reversed.
"We have such a rich diversity of intellectual property coming out of our state," Bigelow says. "The entire competition was designed to take the full state of innovation in Michigan and put it on the international stage."
That's not the only place where conventional wisdom turned out to be not so smart. Most of the start-ups presenting at Founder Showcase were tech-oriented, and almost all were online-based. There were also a smattering of incubators and one that was promoting a caffeine-infused snack geared toward video game enthusiasts. It showed the one-dimensional aspect of Silicon Valley's often celebrated entrepreneurial ecosystem. On the one hand, there's no denying that web-based innovation tends to attract big interest and big investment. On the other hand, the mainstream media wouldn't celebrate Michigan too much if its signature business plan competition was entirely composed of start-ups rooted in the automotive industry.
That's where Accelerate Michigan really set itself apart. It featured promising innovative start-ups from all over the new economy, from alternative energy to life sciences to services to technology. Most of those firms are trying to change paradigms, like Accio Energy's
efforts to reinvent wind energy, not tag along on the latest tech trend. And more often than not, the tech-based start-ups at Accelerate Michigan were based on hard technology developed in labs instead of on laptops.
"This kind of program is on par with anything that is going on anywhere else in the world," Michael Finney
, president and CEO of the Michigan Economic Development Corp
, said during the awards gala for Accelerate Michigan. After watching Founder Showcase, I believe there is more to that statement than just an applause line for the home crowd.
The audience, the audience, the audience
"Don't believe the hype" is not a phrase that applies to Founder Showcase. In its case, "Enjoy the hype" is more apropos. Founder Showcase excels where so many Silicon Valley-based start-ups before it have succeeded, generating and capitalizing on hype. The entire event is, simply, an event with a slick presentation geared toward the young people creating companies more than the older people who write the seed capital checks.
Founder Showcase is just a good time where the mandatory casual dress code translates to the overall experience. It's filled with techno music, free-flowing booze and an overabundance of networking that is the lifeblood of Silicon Valley's entrepreneurial ecosystem. (Quick note: Accelerate Michigan giving judges a free six-pack of Michigan beers
equals great move, while Founder Showcase offering bland macrobrews in one of the best beer states in the U.S. equates to a missed opportunity) Attendees are as likely to rub elbows with a venture capitalist as a hipster proudly rocking a unibrow. This might be a bit bush league, but it created an overall sense of excitement that translated to a lively and engaging pitch competition, and the feeling that this is a community that not only celebrates innovation and entrepreneurship, but one that wants you to join.
The one-night event spins in orbit around Adeo Ressi
, a serial entrepreneur and Silicon Valley staple who now runs the Founder Institute
, a business incubator, and emcees Founder Showcase. The excitable, middle-aged host with many more open buttons on his shirt than hair on his head is more likely to use colorful language than let the night become dull. It's not unusual for him to goad the judges with comments like this: "I thought that was a fucking five (best score possible for an elevator pitch). I'm just going to put that out there."
And it works. Where Accelerate Michigan's stuffy, lecture-style atmosphere makes people sit at the back of the auditorium for panel discussions, Ressi packs them in up front and keeps them attentive. Plus, his keynote speakers
(this time it was TechCrunch's Michael Arrington
) are more likely to draw eyes into focus than glaze them over. The fact is, carefully modulated speeches from university presidents and state-wide politicians, prominent aspects of Accelerate Michigan, don't generate the same enthusiasm from entrepreneurs, nor do they excite the next generation of inventor or innovator.
In the end, Founder Showcase's vibe was much more inclusive and youth oriented, while Accelerate Michigan catered to showing off polished start-ups to conservative, big-money investors. Which is a shame because many of the start-ups in the student-led portion of Accelerate Michigan
could go toe-to-toe with most of the companies presenting at the last Founder Showcase. Unfortunately, these fledgling start-ups were tucked away in a conference room with no one filming their elevator pitches. If Accelerate Michigan is meant to showcase the state's entrepreneurial strengths to would-be investors, shouldn't it also serve as a compelling argument to these young entrepreneurs about why they should stake their claim here?
Accelerate Michigan and Founder Showcase shared a common bond in their sense of building their entrepreneurial communities. Organizers from both events spoke at length about their passion for enhancing their respective entrepreneurial ecosystems. Where they differed is what that means.
Ressi often spoke about building up the tech community, mainly because he and the fellow participants of that night's activities are so invested in it professionally, economically and personally. It's a common theme among Michigan's entrepreneurial activists. The difference is the level of success. Where Michigan's entrepreneurial community employs a relentless focus on reinventing and diversifying the state's economy to break it out of a decade-long downturn, the attendees of Founder Showcase needed to be reminded there was a recession going on outside of Silicon Valley. Small differences aside, the words from both competitions could at times be interchangeable.
"We're implementing strategies to grow the people that have been here the whole time. The people we didn't have to bribe to be here."
"We do this to launch kick-ass companies. Anyone who works and sweats and makes it on stage is a winner."
Michigan's Lt. Gov Brian Calley
landed the first quote at Accelerate Michigan in a far more stirring and, more relevantly, non-partisan speech than I was expecting. Ressi delivered the second quote at the last Founder Showcase, but his words, albeit a bit more dressed up, could have easily come from anyone at Accelerate Michigan.
Jon Zemke is the Innovation And Jobs News Editor with Concentrate and the Managing Editor with SEMichiganStartup.com. He believes there is more to Michigan's entrepreneurial underdog role than most people realize. His last feature was Game Day Entrepreneurship
Lauren Bigelow at the Accelerate Michigan Innovation Competition
Lauren Bigelow presenting the first runner up award to Fusion Coolant Systems
Michael Finney (photo by Doug Coombe)
Adeo Ressi congratulating Founder Showcase Champion Navin Bathija of Neo
Ismael Nzouetom of Founder Showcase runner up I-DIPSO