MIT $100K Life Sciences Leadership Team Shares Insights on 20 Years of Contest Innovation

Chris Tsai | March 10, 2010

The MIT$100K competition is well underway! Both the Elevator Pitch and the Executive Summary have been completed, and submissions for the Business Plan Competition were due on 3/4/10. It’s a good time to sit down and chat with the Life Sciences Track co-leads, Hewmun Lau and TJ Parker, as well as Daniel A. Vannoni, the Managing Director of the overall competition.

CI: The MIT $100K is celebrating its 20th year. How do you keep the competition fresh and exciting?

DV: Our goal is to drive the entrepreneurial spirit, and every year we try to add a new twist. New this year is the Wild Card. The second group of five teams from within each track not chosen to advance to the next round have the opportunity to reapply as a Wild Card. The teams have one week to expand their executive summary from two to five pages and revise their slide deck. After another review, two teams are chosen to advance.

As a native Bostonian, I’m used to underdogs and wild card winners. The process really shows who wants it more and brings out more competitive natures. Who really wants to push their team to the next round? Running a business is a competition of sorts, test of wills. Are you going to drop out? If you did one start-up, are you going to do it again?

At Rice, where we heard of the idea, a Wild Card team has won the overall contest in the last couple of years.

Overall, the competition has changed drastically over 20 years. It used to be a $10K business plan contest, and then the executive summary portion was added as a preparation step for the business plan. Tracks were created next. When other schools were asking us how to create their own business plan competitions, the MIT $100K conducted global startup workshops that later split out from the $100K to help others create business plan competitions. Three or four years ago we started the elevator pitch contest.

CI: How is Life Sciences Different from Other Tracks?

HL: Life Sciences track differs greatly from other tracks such as mobile. I’ve noticed three themes that are always present in the minds of the VCs – regulations, IP protection and the time to market. Compared to other tracks, the business ideas have to be more developed with a proven idea. Many have some IP protection already in place.

TP: Life sciences is a slimmer field but the ideas are far much more thought-out and developed because they have to be past the idea stage just to be sure it makes sense. Judging products or services can be more ambiguous – judges may consider if the idea will work, or who the client/purchaser would be. But life sciences is so highly regulated that the regulations appear as the main driver of decision making for many VCs. Will the product make it through clinical trials? If the idea can even make it to that point, then that’s when it will be considered a good idea.

Read on to learn why business plans are important and how $100K entrants benefit from participation.

CI: Are there specific tracks that tend to advance more in the competition?

TP: Not really. Medical devices won both previous contests this year, but that idea was just good not specific to field.

DV: To put a gauge on what gets through, looking at the broader event, it is a competition. So for the elevator pitch, you look for an idea that has some promising aspects to them, but also stands out in the judges’ minds. There has to be a wow factor or even entertainment factor to it that helps bring a solid idea to the forefront or stick in the mind. For the executive summary contest, the pitch portion is part of competition but not weighted as heavily…it’s focused as much as possible on the written summary.

CI: It’s commonly said that VCs don’t read business plans. Why does MIT still focus on it?

HL: The competition is geared as an educational experience. The benefit of feedback during the competition is valuable.

DV: Absolutely. This is an educational exercise. We do and want business to start from it, we still require a pitch deck, and teams have to pitch full ideas in front of a VC and legal panel. It’s a real life activity to go through. While VCs may not look at business plans, it’s good for the entrepreneur to consider the framework and whole picture as they evolve…it gives a starting point.

CI: Have you noticed less funding for the start-ups during the recession?

DV: Investment has slowed, but capital still flows with a heavier focus on ROI. There’s a dichotomy with west coast and east coast investors – west coast investors are more willing to experiment while east coast investors focus on more tried and true methods. They prefer to enter investments at the middle stage but not as often at early stage. I know of great early stage investors on the east coast, but there are more on the west coast.

CI: How important is the team?

DV: To give people an idea of what judges will look for, we post general questions for judges to consider posted on our website, of course we can’t control if they follow them or not, but one question is about team. Is it the right team to execute the idea? Do they understand the technology? Is there a person to bring the idea to market? Is there a business person to understand the marketplace? Who will set a realistic timeline? For teams who want to seriously pursue an idea, rather than as just as an academic exercise, they will focus on getting the right, well rounded team with lab people, Sloanies, industry people.

Team members can be from anywhere. For instance, the elevator pitch contest is open to any student at any university in the US or MIT alum. There were 350 entrants, and that’s where geography got spread all over. Someone from John Hopkins did well in the contest and found an MIT student interested in their idea and who wanted to work with him. This allowed him to enter the next round. Contestants can use the competition as team building exercise, so that’s why we start with really broad, individual ideas in the elevator pitch portion. The executive summary starts to pull together a team and identify what types of people they need to round out the team. Feedback along the way is a key benefit.

CI: Does the Winner Take All?

HL: Absolutely not! While the winner does receive the prize money, finalists get cache, credibility, and validity to their ideas.

TP: Going through the entire process and receiving all the feedback helps create entrepreneurs and prepares them for future entrepreneurial activities.

DV: Many successful firms from the 100K did not win over the past 20 years. After the competition ends and teams continue to pursue their work, investors know that the teams received professional legal and venture mentorship during the competition and have put a lot of thought into their ideas.

CI: What have you personally gained by participating in the event?

HL: With no previous exposure to entrepreneurship, I believe the events have been a great way to meet not only MIT-affiliated folks but people from other schools as well. I’m now more interested in start-ups and hope to create my own one day. As an organizer, I have had direct contact with the VCs and hope that extra level of contact will assist with future networking.

TP: I agree. As an organizer, the best thing for me was the insider view to the judging sessions. I was exposed to so much more feedback than the limited amount given to entrants. I also hope to work or create a start-up in the future.

HL: Want to meet some of the finalists and learn about their ideas? In May the finalists will all have poster presentations where you can talk with the teams and learn more. Check out our website for more info.

CI: Thanks to Hewmun, TJ, and Daniel for their time.