The winners of our annual business plan contest are already bringing in clients and cash.
Dropping out of school to start a business became as much a dot-com-era cliche as trying to become the next Bill Gates. Now, thanks to economic uncertainty, dropping back into school to launch a company is becoming a more likely rite of passage for future entrepreneurs. More than 1,000 colleges and universities now offer at least one entrepreneurship class, representing an increase of about 30% since 1999, says George Solomon, an associate professor at George Washington University's School of Business and the author of the recently released National Survey of Entrepreneurship. The appeal of the courses can be measured in dollars. A survey of more than 2,000 University of Arizona graduates found that those who had studied entrepreneurship earned 27% more annually -- a difference of about $12,561 on average -- than MBAs who had not done so. All told, the entrepreneurship students' personal assets were worth 62% more.
Many schools are launching business plan contests to give students experience in raising capital. The plans are more than academic exercises. The winners of our second annual business plan contest, the FSB Student Showdown, already had funding or clients, or both.
To find the teams, FSB invited winners of universities' internal business plan contests to compete against teams from schools across the nation in an all-star competition. It wasn't easy for our panel of experts to choose the winners from the 58 entries that arrived from 45 schools. They ranged from biomedical companies to a team from the University of North Carolina that wants to sell tacos in India.
Vertebration, from Ohio State University, won the $50,000 first prize with a new implant for spinal surgery. Harvard Business School's Extend Fertility, winner of our $10,000 second prize, helps young women freeze their eggs. Seahorse Power, from Babson College's MBA program, claimed the $5,000 third prize for a plan to sell solar-powered trash compactors.
How these teams ultimately fare will depend on their execution. But, armed with practical training, they are now well prepared for the challenges that await entrepreneurs beyond the campus.
The three winners of last year's competition are thriving, despite some inevitable growing pains.
Property Solutions International hit a few bumps after it won last year's contest. But after redesigning its property-management software and renaming it Resident Works ("Vantage XP" wasn't catchy enough), the team, from Brigham Young, has increased its clients from 57 to 360. In September it closed a $550,000 round of financing. Founder David Bateman, 26, projects $500,000 in sales for 2004, up from $243,000 last year. And with a new director of sales and marketing set to come onboard, he's optimistic about continued growth. "Our business model has really confirmed itself," he says.
KidSmart, which makes smoke detectors that wake kids with a recording of a parent's voice, placed second in last year's contest. (Studies show that children often sleep through traditional alarms but will respond to a parent's urging.) The Atlanta company, which was launched at the University of Georgia's MBA program, has caught fire. The Vocal Smoke Detector, retailing for $69.95, is already selling in SkyMall and in Hammacher Schlemmer's fall catalog. With $1 million from private investors and 2004 sales expected to reach $2 million, co-founders Bruce Black, 30, and Matt Ferris, 27, are ramping up production in China in preparation for a retail launch. What's next? A vocal smoke detector that can be hard-wired into a home's electrical system.
After taking third place in our contest last year, Jadoo Power Systems hit it big, raising $5 million from Sinclair Ventures, a subsidiary of the Maryland-based Sinclair Broadcast Group. Since then the team from the Harvard Business School has been on a growth jag. The Folsom, Calif., company, which makes fuel cells that power devices such as weapons-surveillance systems, global-positioning devices, and broadcast cameras, has opened a factory in California, is expanding its staff of 22 by 50%, and hopes to move into Europe and Asia by the end of 2005. In June the National Association of Broadcasters honored Jadoo for outstanding technological achievement in the broadcast industry. Although Jadoo would not disclose its annual sales, CEO Larry Bawden, 46, expects revenue to double next year, thanks in part to a recent surge of interest in Jadoo's products for spy cameras, fueled by law enforcement officials tracking terrorists.
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