The Next Great Internet Company—Who Cares? A Few Observations from Inside the 100K Contest
What will be the next great Internet company? Will it be a firm developing technology for online video guides, or one with a new way to assess and manage Web security risks? Maybe it will be a company mining customer data for small and medium-sized businesses, one building an online ad management system for Chinese video publishers, or one with a way to make clothes shopping more appealing for men.
The team behind that last idea, Project Einstein, claimed their venture really was the “next great” one when they pitched it in the Web track finals of the MIT 100K Entrepreneurship Competition, which will announce its overall winner tonight. But, of course, picking out one winning team isn’t the point. The real aim, and this sometimes seems to get lost in the competition hoopla, isn’t to spur the one next great company (or even a few), but to produce scores of great future entrepreneurs by introducing them to the entrepreneurial process—including focusing on market opportunities, forming teams, developing business plans, and pitching before real VCs and other experts. As Ken Morse, managing director of the MIT Entrepreneurship Center, poetically puts it: “It is an educational process which infects hundreds of students and faculty with the entrepreneurial virus. The virus takes hold at different times for different people…[and] for every successful company there are a hundred teams born with deep-fired burnings, waiting to be launched at the right time in the future.”
This year, for the first time, contest organizers opened some of that process—the finals of a few tracks—to journalists. Om Malik from GigaOm sat in on the Mobile track, and a reporter from Technology Review observed biotech while I was watching the Web 2.0 pitches (Erik, meanwhile, visited the semi-finals of the 200K Energy Prize competition, a close affiliate of the 100K event).
The Web 2.0 finalists made their pitches in a conference room at Polaris Venture Partners in Waltham, MA, where the group of judges was chaired by Polaris general partner Sim Simeonov (who has his own blog here and will no doubt soon be writing about the 100K as well). The other judges present were: Stan Fung, managing director of FarSight Ventures; Jon Gworek of Morse, Barnes-Brown & Pendleton; John Pyrovolakis, of the Kauffman Foundation for Entrepreneurship’s Innovation Network Initiative; and entrepreneur Marcus Ruark, founder of Optiant.
To protect confidential team information, I am keeping my comments high-level, but here are the main things I took home:
My first impression was a reinforcement of what I had already thought—the contest is a great training ground, as opposed to a proving ground. People seem to want to view the winners as real businesses, and the losers as falling short of this goal. In truth, the teams are mostly all pretty raw, and not as close to real businesses as they might think. But just because only one wins doesn’t mean the runners-up aren’t in the end more viable enterprises.
Simeonov explains that judges can’t even attempt to judge 100K teams by the same standards they would use to evaluate a real business. By the time of our session, judges had only seen the teams on paper, and had provided some written feedback in advance of the finals. Now was their first time to see a live pitch. Teams had far less time to make their pitches—20 minutes each (including answering questions), in contrast to maybe an hour in a real VC meeting. All told, Simeonov says, he normally spends 10 hours or more with entrepreneurs and another 40 to 50 hours in due diligence before picking a “winner” to fund. For the 100K, judges had more like 40 to 50 minutes.
A couple other thoughts I jotted down during the presentations:
—While I probably wouldn’t invest in any of the company ideas if I even had the money and wasn’t a journalist who doesn’t make any investments in what he covers, I would invest in every person I saw. (Anyone need a job?).
—The judges were far kinder than they would be in a real venture setting. For starters, not a one noticeably looked … Next Page »