In a previous post, I spoke with members of the first- and second-place teams in the B.U. Business Plan Competition.
That was before my experience as a member of one of the teams that won the 2009 Rhode Island Business Plan Competition.
Our company, BioIntraface Inc., is developing a product designed to reduce the 67 percent infection rate from external fixation, using a nanotechnology coating material.
We won $45,300 in cash and in-kind services based on our business plan. Here are a few suggestions based on our experience.
Is winning a matter of simply following these few suggestions? No — we won the contest because our management team has the expertise and experience to launch a successful medical device company. BioIntraface has technology superior not only to the current standard of care, but also to other technologies currently in development. Our first application addresses a real clinical need with an easily recognizable benefit to society. We are building a company that will have a successful exit in several years’ time. You’ll need all of this first before my suggestions will help you put together a winning business plan.
Writing the plan
If you learn nothing else from reading all this, pay attention to this: Buy a copy of “Business Plans that Win $$$: Lessons from the MIT Enterprise Forum.”
Sure, the title is a bit cornball and it was printed almost 30 years ago, but this book has everything you need. I probably wouldn’t bother with using business plan writing software. You need to toil at this a little and that happens best with a little carpal tunnel pain.
Decide on a business model. How are you going to monetize this business? Every aspect of your business plan should directly support this choice, so think this first decision through carefully. As you get to each section of your business plan, think about what best fits with your business model.
When you are done writing your “product” section, where you describe your technology, delete at least half and keep the rest. Except for you and (maybe) your thesis advisor, no one cares about the intricacies of your technology. It may be the easiest section to write, but your attention would be better served on any of the other sections.
Include a sensitivity analysis. You must be able to defend the assumptions that cause the widest swings in your financial projections.
Finish the plan early so that you can several people review the document. At least some of them should not have any technical knowledge of what you are doing. If they can’t get through your executive summary without their eyes glazing over, you need to start re-writing. Your judges may not thoroughly read much more than this one page.
Don’t assume that the judges remember everything about your company, even though they picked you as finalist after reading your business plan. For the RIBP competition, the judges had a weekend to sift through several inches worth of plans and pick finalists. Really, the best you can hope for is that they remember you as the “med device” guys that addressed some dire need with which they felt a connection.
Think about your audience (the judges). What are their backgrounds? At the RIBP competition, we had lawyers, academics and businesspeople. What outside knowledge do they have (or not have) about your technology? Your presentation must quickly level this knowledge playing field and simultaneously bring all of the judges along. For example, when describing the U.S. reimbursement landscape for your medical device, don’t put “CMS” on the slide. Rather, write out “Medicare/Medicaid,” but say “CMS” as you are discussing that point. You get your point across to people who don’t know about reimbursement while signaling that you have expertise in this area to those who do know the subject.
Have more than one team member present. Nothing indicates that a team is dysfunctional or too nascent like having one person present the entire deck. Your technical person should feel comfortable talking about the need and solution. Similarly, your business person should feel comfortable talking about the marketing and financial projections.
Clearly articulate how all of the stakeholders benefit following adoption of your product. It isn’t enough to have a device that will provide patients better care if the doctors, nurses, hospitals and insurers don’t also benefit in some way. Eventually (potentially after the competition), you will need to quantify these benefits into percentages and dollars. VCs are looking for products that provide better patient care while costing the health system less than existing technologies.
Finally: Practice, practice and practice. By the time we presented, we had already gone through our presentation in front of three other audiences (one with a clinical background, one with a scientific background and one with neither). A tactic that the judges may use to evaluate you is to interrupt you to ask multiple questions and then observe how well you can stop presenting, answer the question, and pick up the previous discussion thread. For the RIBP competition, we actually started to run out of time because the judges were asking so many questions. I had to decide on the fly which slides I could skip over in order to finish in time, while still capturing all of the key aspects of our presentation.
Why are these competitions so important? It isn’t so much the small amount of cash and services for the winners, nor the fact that this is a great opportunity to get a little free press. Most importantly, these competitions allow you to shape your business concept into a package that is compelling to others. When you pitch this to potential investors, you will have worked out more of the kinks. Ultimately your business will be better planned and more likely to succeed.