MIT 100K Competition

I attended the finals for the MIT 100K business plan competition this past Wednesday. The competitors entries were all very impressive, but I was especially impressed (as was the rest of the audience – they won the audience prize) with the company Global Cycle Solutions who won the development track prize. They basically have come up with a design to easily convert energy from a person pedaling a bike to do other “work”, like charging a cell phone or shelling corn. The idea is that the bike is often the first capital investment that people in poorer countries can make, and this way, they can turn their bike into a mini-business. A person riding a bike in place with this special attachment can shell corn much easier and faster than the usual way (by hand).

Although it seems as though not all the applications they purport to be able to do are ready, and the manufacturing of these attachments will be an issue, I think it is a cool idea. I also like the fact that they demonstrated the use of how a little clever engineering could potentially improve the lives of many people in developing countries in a way that is environmentally friendly and personally empowering to boot.  Well done!

Overall, the experience was very interesting. The keynote speaker was Rodney Brooks, one of the founders of iRobot, and a professor at CSAIL at MIT – a lab where I hope to be spending a lot of time in the coming two years. He described his experiences as an entrepreneur, and outlined in a very entertaining speech (about halfway through that video) his tongue-in-cheek “PROP” method for starting a business, standing for Passion, Rejection, Opportunity, and Persistence. Having worked for a startup out of college, I can certainly vouch for those qualities being a pre-requisite  for a successful venture. In deference to him, however, I would add an additional “M” and “T” in there, forming what I call the “PROMPT” method (my thoughts are purely from my experience – I’d be interested how this jives with the experts at Sloan).

The “M” stands for Management. I think it is romantic to believe that an early-stage company can succeed with poor management, as long as the idea is good. I think this is an especially seductive thought for engineers especially, who are maybe used more to academia and certain work environments where good work is generally recognized and rewarded based on the merits of the work. And I am sure there are certainly plenty of cases where this is true. In my experience, however, poor management (mis-allocation of valuable resources, poor communication with employees, lack of professionalism) can easily sink an early stage company, even if the idea is sound. In addition, the management should be intimately familiar with the product, and ideally be working on the project alongside the employees in its development, at least at first. One question on my mind: can you learn to be a good manager?  (Rhetorical answer: I certainly hope so, that’s why I’m going to Sloan!)

The “T” stands for Timing. This is a difficult principle, as timing involves an element of luck. However, when I look back on the development of our product, a telehealth system to deliver preventive care best practices for patients with chronic disease, I wonder what would have happened if we just started the company one or two years later (say 2005 instead of 2003). Back in 2003, the exploding health care costs in this country, although well known, had not seeped into the general consciousness of the country as a national crisis (as it should have been). Moreover, telehealth and data driven health solutions were sort of niche ideas, not a part of the mainstream solution of health care reform as they are now. As such, we had a difficult time selling our system in this country, because nobody was really motivated to pay for it – a well documented failing of the episodic based U.S. health care system as opposed to the “wellness” systems that exists in many other countries where the government is the single payor. In any event, we ramped up (despite the fact that we hadn’t secured any contracts) and by the time Obama got elected and the country finally came around on the idea, the company was  bust, rather than waiting patiently with a solution in hand. Now other major players have entered the scene. There is certainly something to be said for the “stealth mode” that seems to be popular now – it certainly increases the flexibility of the company to  better time entry into the market place. Operating within one’s means from the beginning, even if it means few employees making steady contributions, increases the liklihood the company will be around long enough to seize opportunities when they arise.

Anyways, I am interested to see how the companies involved in the 100K progress. They certainly seem to have bright futures, and the fact that they have gotten this far should indicate some grasp of the basic principles (aside from luck of course!) and that most valuable of commodities – good press!