The requirement of the course is to actually create a business that the student can realistically do right now.

Of all my experiences, I think that the MIT 100K successfully baked the right incentives built in- namely, the encouragement to pivot- by de-emphasizing the business plan as a final beautiful product to be untouched and followed, but rather a series of mini competitions where pivoting and user testing worked in your favor. Maybe it’s a step towards what you are envisioning? I do believe business competitions have their place in the world as a motivator, discipliner, and network expander for new entrepreneurs.

Brad Heitmann
Chief Executive Officer
Granada Advisors | Crux & Gage
Mobile: +1.801.824.4168 | Skype / Twitter: bradheitmann
bradheitmann@granadaadvisors.com | brad@cruxandgage.com

I think the real disconnect lies in that BPC’s pull from an academic setting – meaning they often include those that are not really entrepreneurs, but are students performing an academic exercise. Real entrepreneurs are few and far between, but I bet even in the most regimented BPC the true entrepreneurial students are out testing their hypotheses and adjusting their model as need be, or pivoting as you would say.

Steve

I’m with Nathan, I really like the business plan competitions, I judge several, and I think you’re putting up a straw man here by equating business plans misused with business planning. It’s sort of like saying regular exercise is bad because some people try to do a marathon without training.

The major business plan competitions give mostly real businesses an opportunity to pitch to investors/judges and get real feedback. As Nathan and others suggest, it’s about the pitch, and ultimately, about the business, not just the plan document.

I posted recently about my favorite moment at the recent Moot Corp, when the entrepreneurs put up projected numbers and the judges noted it didn’t match their plan. “Sure, that was several iterations ago,” they answered. the point being that in the real world the planning process, well used, is pretty much the same as what you’re calling modeling. It’s changing quickly, reflecting new developments all the time.

The contests you describe are pretty much in the past now. In recent years they’ve evolved from an academic exercise to mostly real businesses doing mostly real pitches for mostly real investors.

And what you probably don’t see, unless you’re a judge (like I am, and Nathan is), is the back side of these contests, when the entrepreneurs get time alone with their investor/judges for real discussion about their pitch, their business, and what they might do next.

And I do agree completely with your underlying point, which is that business planning is management, steering, reviewing and revising, never a static document. My favorite quote is Dwight Eisenhower’s: “The plan is useless; but planning is essential.”

Tim Berry

I suggest modifying the contest slightly, to focus more on the identification of risks, the testing of those risks, and then making changes based on these validated learnings.

I call it the “Business Development Contest”. Read more at http://www.philmichaelson.com/fundraising/introducing-the-%e2%80%9cbusiness-development-contest%e2%80%9d/

For those who feel business plans have some merit, I think the heart of what they appreciate is really the essence of lean startup / customer development / Durant School of Entrepreneurship: validating assumptions with customers, understanding their buying process, etc. Clearly that part of the process is right but I don’t think that BPs or BP competitions deserve the credit or should be protected for that reason.