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?