Fuentek Team Members Judge Duke Start-Up Challenge

Duke University hosts and co-sponsors this competition to encourage innovation and entrepreneurship among its students and the business community. This year the program awarded $50,000 to the first place winner, Sundance Genetics, which developed a corn seed technology; $20,000 to two runner-up teams, TheraNova and Visual Data; $5,000 to the "People's Choice" team, also TheraNova; and $1,000 to each of the finalist teams, Alchemy and Peregrine PowerKraft.

Commenting on her judging experience, Ms. Schoppe said, "It was great, and the Duke students that ran the program did an excellent job. The winning corn seed technology holds a lot of promise, and we hope to watch it go all the way through an IPO (initial public offering) and end up feeding the world."

Why be a judge?

As an entrepreneur herself, Ms. Schoppe was naturally drawn to the competition. Furthermore, she enjoys the interaction with students. She spent several months during the summer of 2001 working with a group of MBA students at a mid-western research university. The Duke Start-Up Challenge gave her an opportunity to get involved locally.

Qualifications for judging

Although she had never judged a student business plan competition like this before, she regularly evaluates or develops content for clients’ business plans. This experience made her aware of the key factors to success and how they should be written into a business plan as well as what investors are looking for.

In examining a business plan, Ms. Schoppe said she looks for answers to questions like, "Do you have a strategy to reach your market?" "How will you protect against competitors?" "Is there a team in place (or plan to get them) that can perform the necessary tasks for the next 12 months?" The most important thing she looks for is in the first sentence of the business plan. It has to tell the reader what is being sold. When a venture capitalist (VC) or other investor is going through a stack of business plans to make a decision about where to invest, "you've got to attract their attention from the very beginning," said Ms. Schoppe.

Because Fuentek deals primarily in intellectual asset management, one of the things Ms. Schoppe looked for in the teams' business plans was intellectual property (IP) protection and ownership. She said that "VCs will shy away from investing very quickly if they don't see some barriers against competition. IP protection allows barriers to be erected in a cost-effective way."

Having gone through the start-up process herself, Ms. Schoppe also was able to recognize what was realistic about each team's expectations within the first 6 months. "Although I have a services business, any company must go through some basic steps to be successful," Ms. Schoppe said. "A customer focus from the very start is essential. Some start-ups lose track of this and focus on the investor, forgetting that there won't be a business to make money from if customers aren't buying from you."

Making the decision

The judge's task was to determine if the ideas had a legitimate chance of becoming a sustainable business by looking at these criteria:

• Did the plan represent an innovative idea?
• Did it fulfill a need in the marketplace, and could it achieve and sustain a prominent market position?
• Did the team demonstrate the ability to execute the strategy?
• Could they generate and manage an acceptable growth rate in its market?
• Did the team have an effective plan for the using the seed capital?

Commenting on the requirement of fulfilling a need in the marketplace and achieving a prominent market position, Ms. Schoppe said, "You can have developed the coolest widget in the world, but if it serves no purpose for which a customer is willing to pay, you will never get off the ground. The students in my training courses get tired of hearing ‘better, faster, cheaper,’ but a successful technology or idea must have at least one of these elements—preferably two—and cheaper should be one of them."

With a record number of competitors this year, selecting a winning idea and plan was not easy. Ms Schoppe stated, "I would have been pleased to see any of the top three entrants win. I liked each for different reasons, but could see possibilities and potential problems for each as well. The weights you apply to the criteria can switch the ranking very easily, so it becomes more subjective for the final decision. Discussing the pros and cons with my fellow judges helped us all reach a consensus on the winner."