Ithaca College hosted its Fourth annual Business Idea Competition last week. 12 teams of student entrepreneurs pitched their business ideas to a panel of industry professionals, competing for a chunk of the $7500 in total prize money. Teams had 4 minutes to present their idea, followed by 4 minutes of questions from judges. What you often see in events like this is that they are often won or lost in how well they handle the questions.
The fastest 4 minutes of a startup
Although the ideas presented addressed a variety of problems, many teams were presented with similar questions:
1. Have you talked to potential customers?
This one can be a red flag. If you haven't talked to any potential customers, how do you know you're providing something people will pay for?
2. When you talk to potential customers, how much money do they say they would pay?
This one can be surprisingly difficult to answer. I’ve seen presentations where students price their product/service contrary to what a consumer would actually pay.
3. How will you expand or repeat business?
This is a classic "what's next" question. A business relies on recurring sales. We also want to know that you're thinking of how the business can grow.
4. Any regulatory issues?
Depending on the idea, legal regulations could be a real hurdle to tackle. Prepare to look into the full extent of those regulations, any associated costs, and consider whether or not certain aspects of your initial idea can be changed to alleviate some of the legal red tape you could run into.
5. What is your revenue model?
This one is tougher than it sounds for some companies. A common error I often see for software is "we're going to sell ads". The reason this is a problem for most new companies is that ad rates for online and mobile are so low that you need to have a massive number of users to make money this way. It's great for Facebook, but the other 1MM apps in the Apple app store need something more.
6. Have you talked to industry professionals?
This falls into the "do you know what you don't know" category. If you don't have significant experience in the industry you're going into, then please talk to someone who is in that industry.
Although the ideas presented addressed a variety of problems, many teams were presented with similar questions:
1. Have you talked to potential customers?
This one can be a red flag. If you haven't talked to any potential customers, how do you know you're providing something people will pay for?
2. When you talk to potential customers, how much money do they say they would pay?
This one can be surprisingly difficult to answer. I’ve seen presentations where students price their product/service contrary to what a consumer would actually pay.
3. How will you expand or repeat business?
This is a classic "what's next" question. A business relies on recurring sales. We also want to know that you're thinking of how the business can grow.
4. Any regulatory issues?
Depending on the idea, legal regulations could be a real hurdle to tackle. Prepare to look into the full extent of those regulations, any associated costs, and consider whether or not certain aspects of your initial idea can be changed to alleviate some of the legal red tape you could run into.
5. What is your revenue model?
This one is tougher than it sounds for some companies. A common error I often see for software is "we're going to sell ads". The reason this is a problem for most new companies is that ad rates for online and mobile are so low that you need to have a massive number of users to make money this way. It's great for Facebook, but the other 1MM apps in the Apple app store need something more.
6. Have you talked to industry professionals?
This falls into the "do you know what you don't know" category. If you don't have significant experience in the industry you're going into, then please talk to someone who is in that industry.
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