Competitions to Kick-start Your Business
In the last 2 Blogs, Plugging the Start-up Funding Gap in South Africa,[1] and Five Things Funders Consider when Funding a Start-up,[2] the focus has been on funding for entrepreneurial ventures of a risky type, in essence start-ups. This edition will focus on continuing the conversation with a spot light on the role of innovation competitions in attracting funds to support the building of a start-up. In my book Nuts & Bolts,[3] I dedicate a chapter to this topic, with much emphasis on how The Innovation Hub, the innovation agency of the Gauteng Province in South Africa established the Gauteng Accelerator Programme (GAP) Innovation Competitions. The GAP programme was [4] used not only to showcase innovative ideas and solutions but also as a platform to build a pipeline for incubation of the solutions through well-structured programmes.
There are many innovation competitions across the African continent that entrepreneurs should be aware of, and where possible, participate in.[5] As I reflect on the 15 years I spent in the public sector in South Africa involved in innovation and entrepreneurship initiatives, most of the successful entrepreneurs that I have been honoured to know, were discovered in some of these innovation competitions. You see – the innovation competitions are to innovation and entrepreneurship, what the Idols or the Voice are to budding musicians. It is also important that entrepreneurs do their homework before entering competitions so as to reap its benefits. Below are some pointers that may be useful.
1. Establish Alignment with Your Business Idea – It takes time to enter competitions and prepare for the pitches. It is therefore important to align the objectives of the competition and your business idea, and secondly, the stage of development of your idea. Increasingly, competitions are becoming sector specific or mission driven (e.g. climate change or social entrepreneurship). The question is whether or not your business fits in with the organiser’ objectives. It is also important to understand the criteria on which your innovation will be assessed, and thus tailor your entry and pitch to talk to what the competition hosts are looking for.
2. Credibility of the Competition Host – not every competition is worth your time and effort. It is important that you verify the credibility of the host of the competition. Will winning this specific competition help enhance your stature and make it easier for market partners and funders to want to take a closer look at your business? Do they have great public relations standing? What has been their track record of running competitions? Why are they doing it?
Who funds them to run the competition? What are their expectations of entrants – and more importantly, should you win, what will they expect from you? Who are their past entrants, finalists, and winners? Do the past entrants and finalists have positive things to say about the hosts and the manner in which the competition was executed? It is important to ask all these questions and if you are uncomfortable with any of the answers, perhaps reconsider whether this competition is worth your time.
3. The Prize and Expectations – One enters any contest with the hope of being a winner and winning the coveted prize – whatever it is. The prize for innovation competitions vary from one competition to another. In some cases, it is cash that comes with no strings attached. On other cases, it is seed funding linked to milestone development. In some other cases, the prize is just walking on stage (at least pre-Covid) and being applauded by attendees at an Awards Gala Evening to receive a certificate or trophy, with the promise of media publicity to market your innovation. Other competitions include being admitted to an incubation or acceleration programme – to help you further develop and market the innovation that forms the core of your business or competition entry. If you one looks at The Innovation Hub GAP Awards Competition, a top finalists the prize comprises a cash award, seed funding linked to milestones and commitment to enter into one of their incubation programmes. The SAB Social Innovation Awards[1] on the other hand the prize comprises a cash award and much publicity.
4. Networks – depending on the structure of the competition, some help strengthen one’s network. In the one instance, one builds a bigger network with other entrants and in some cases, there are complementarities amongst entrants that may result in other new ideas or collaboration post the competition. The panel of judges and also the personnel running the competition could be useful for your future network. Some of the judges and personnel have relationships with funders, potential bulk off-takers or industry partners for your innovation, or access to technical expertise to address some challenges that you may still be facing with the technical viability of the idea. It is thus important to look at who past judges have been and their breadth and depth of their network. One competition that I was associated with for some time as a judge was the Innovation Prize for Africa (IPA)[2] which my good friend Pauline Koelbl used to run as part of the Africa Innovation Foundation. Pauline goes into depth in Chapter 14 of Nuts & Bolts, on the ins and outs of this competition, which had economic and social outcomes as its objectives, and focused on innovations that address challenges faced by Africa – African solutions to African problems by Africans.
5. Building a Profile and Market Acceptance – The value of competitions often is not in the prize and any of the things I have mentioned, it is in the learning and feedback that one gets from the panel of judges, other entrants as well as additional input that some of these competitions get from external assessors, when preparing the information pack for the judges, which often competition hosts are open to making it available to entrepreneurs. The other benefit is in perfecting your pitch using this feedback. In some cases, the industry linkages and access to market have been benefits that I have seen arise from some of the competitions.
Notwithstanding the value of competitions in helping entrepreneurs build their businesses, I must caution against one becoming a serial competition entrepreneur. Remember, your sole purpose as an entrepreneur is to build a business and ensure that your innovation gets to the market and your business can thus be scaled. Whereas in the early stages, particularly when one is trying to find softer forms of funding the venture, the allure of the cash prize associated with competitions can become overpowering, one must guard spending far too much time in competitions and not in the market getting customer validation for your innovation.
The entrepreneurship battle is refined and aided by competitions. Ultimately, however, the battle is won in the market place through acceptance of your innovation by customers who are willing to exchange some of their cash for the solution your innovation provides. I have seen far too many ideas languish in the “Halls of Fame of Competitions” – where entrepreneurs become obsessed with the fame and publicity associated with the awards. What is more important to say at the end of your entrepreneurship journey – that you won a lot of competitions or you successfully got your innovation into the market and built a strong and sustainable business? So with this in mind – strategically use the competitions to get the advice you need to refine and grow your business value proposition, access whatever cash award that the competitions may come with in order to bootstrap your business for success, build your networks, and get some validation that you can use when talking to funders and industry partners. Given the funding gap that has been referred to in my earlier blog, often the cash prize from innovation competitions become the difference between survival of a start-up and its demise. One must just guard against a situation where the business is sustained by competition money, which in essence should be going to strengthening the value proposition as opposed to overhead costs.
Wishing you the very best – Africa is need of your solutions to the multitude of challenges she faces.
#MakeItCount!
[1] https://sibandalegacy.africa/?p=581
[2] https://sibandalegacy.africa/?p=861
[3] https://www.amazon.com/Nuts-Bolts-Strengthening-Innovation-Entrepreneurship-ebook/dp/B08QD63THV
[5] https://ventureburn.com/2020/01/prizes-challenges-african-tech-entrepreneurs-q1/; https://www.afterschoolafrica.com/9200/business-plan-competitions-and-awards-for-african-entrepreneurs/;
[5] Here are six prizes, challenges African tech entrepreneurs can enter in Q1 2020 – Ventureburn
