Entrepreneurship or Rockin’ Da Vote?

There are a number of competitions out there designed to ‘promote enterprise’.   In some of them the key arbiter of success is the ability of the would be entrepreneur to turn out a vote.  Whether it is about getting your pals to turn up at a dinner and vote (old skool) or winning support on the web as in Barclay’s One Small Step Competition this is a puzzling phenomenon.

Prizes are awarded in part on the ‘quality’ of your business idea, as established by judges, and on the number of people who you can persuade to ‘click or tick’.  Kind of Dragon’s Den meets Britain’s Got Talent.  A popularity contest with business plans.

I would rather see bankers, and others with cash to spare, investing in businesses rather than giving prizes through competitions.  Competitions identify winners and losers. We should be identifying ‘investment ready’ and ‘not yet investment ready’ if we are really interested in supporting entrepreneurs.  And what happens if the winner is not yet investment ready?  Or they require investment at a different time or level to the prize?  What if it is not cash that they need?

Competitions work well for the publicists and the marketeers.  But I am not sure who else they really serve.  Let’s put our time and money into proving real support on the journey to investment readiness.

Let’s get back to the work of making informed investment decisions instead of awarding prizes in swirls of publicity.  Of helping entrepreneurs on the long journey toward investment readiness that rarely fits neatly with competition deadlines.   This way more entrepreneurs might get the right level of investment at the right time rather than a few ‘lucky’ prize winners.  I remember hearing one ‘prize winner’ wondering how to spend the £10k she had just won and making some quick and bad investment decisions to fit in with competition timescales.  Her business is no longer trading.  Another asked me whether I thought the cheque made out in his name was for him or for his business?  The last I heard he was splitting it 50:50.

I also believe that the ability of the entrepreneur to raise clicks and votes is a poor indicator of success.  Let’s face it on this basis Paris Hilton is going to give Warren Buffet a beating.  Ashton Kutcher would be a nailed on winner.  Unless of course the other finalist was Steven Fry.  The best connected and most socially networked do not have a monopoly of good ideas.  Nor, in general are they the ones for whom the investment might make the biggest difference.  Such voting mechanisms are surely discriminating unfairly?

As it says on the One Small Step website

‘it’s worth getting supporters on board now, so you’ve got plenty of local backing in time for voting’

And this perpetuates another myth.  That business ideas are in competition with each other.   That we have to choose winners and losers, when the market will do this much more effectively in its own time. In fact we should be looking to help everyone with passion, talent, commitment and a viable business idea.  There is always room for another good idea.  Investors will back propositions that meet their  criteria for risk and reward.  I am not convinced that creating winners and losers in very public competition really helps.

It is not about the competition for first place but about the development of an entrepreneurial ecosystem in which players collaborate and support each other as much, if not more than they compete.  I have seen how competition based on popularity can damage local entrepreneurial ecosystems as the community fragments into ‘camps’.

So, if you are about to sponsor yet another ‘enterprise competition’ please just pause for thought.  Could your money be better used to create a sustainable and enterprising society?

Comments

  1. Hi Mike

    Great blog, very thought provoking… do you also think this about competitions that judge entrepreneurs solely on the strength of their plans?

    Matt

    • Thanks Matt. Perhaps surprisingly, yes. Lots of great businesses, probably most great businesses don’t start with ‘plans’ but with practice. Entrepreneurs just get going and the plan evolves from business practice, not theory. The ‘business plans’ at the launch of Sky Sports didn’t add up (no-one was prepared to pay £9 to watch a football match on telly). And market research suggested that there was no market for a Walkman either.

      We can have opinions about plans before they are implemented, we may even form an opinion about the risk of investing in them, but in my opinion we should not ‘judge’ them. What are the criteria we would judge against?

      And anyway, what is it we are judging? The business plan? The entrepreneur and how effectively they present themselves? Some implied combination of the two?

      In my experience competitions distort the entrepreneurs journey. Sometimes this distortion helps. More often than not it hinders.

  2. Hi Mike

    I take your point, esp the bit earlier about people winning these sums and not knowing what to do with them but students do like competitions, sometimes they are one of the few ways to generate interest – I wonder how to affect cultural change?

    Matt

    • I think the secret is to ‘Start where they are at’. Don’t try to force an interest in business with gimmicks, prizes and celebrity. Just talk to them about their self interest and power. They will become more enterprising all on their own. It is what people do in healthy environments when they are free to develop their capabilities and ‘become the person they want to be’ without distortion.

  3. An extension of that might be the formal education is not healthy a la Ken Robinson?

    • Tomorrow I am speaking at a conference about Unleashing Enterprise. I think that teachers and the system they operate are the prime leashing mechanism in the western word. They leash enterprise, creativity, leadership in pursuit of compliance on which the system is premised.

  4. Harry Fortune says:

    Pertinant post Mike. I saw someone yesteday who wants to enter the Barclays Competion with the aim of winning and using the money as their start up capital. They told me about the voting and I asked them if the competition is really a popularity contest? They hadn’t thought of that and are now working out how to become more popular so they can secure more votes if they are in the pool of potentail winners. Being enterprising? They are at Uni so are hopign to engage as many of the students as possible.

    They had a good business idea. No business plan as yet as the competition on needed a video and 4 page synopsys. Good to base a £50k prize fund on?

    They are now going to look at a business plan, interestingly something they hadn’t really done on their business degree. They are also going to consider their funding options incase they don’t win the competition. Is there a little bit of the become a celebrity type thing happening in these types of competitions, along the line of The Apprentice, Dragons Den, and all the other ‘reality’ tv shows?

Speak Your Mind

*

Follow

Get every new post delivered to your Inbox

Join other followers: