The World Bank announced on 31 January 2011 that it has opened public voting on the applications submitted to the Apps for Development Competition, a challenge issued to software developers by the World Bank to get new perspectives in identifying solutions to development problems. The Popular Choice Award will be determined by public vote and the winner will receive a cash award and a feature on the World Bank website. The competition is part of the Bank’s Open Data Initiative, which last year released for free and for the first time the Bank’s catalogue of development data.
Applications were submitted from 36 countries across every continent with more than half came from Africa, Asia, and Latin America. The apps use a wide variety of World Bank data, including information about health, the environment, children out of school, agricultural land data, gender statistics, population growth, and mortality rate, among other datasets. The 107 apps came in response to the World Bank’s global call for apps in October 2010 to help find solutions to today's development challenges and to raise awareness of the Millennium Development Goals.
The 107 eligible entries are now available for use, review and voting on the Apps for Development website through 28 February 2011. The apps created range from SMS services to apps for the Apple iPhone, and include games aimed at children, as well as educational and statistical modeling tools. The winners will be announced at the joint World Bank/International Monetary Fund Spring Meetings in April 2011.
Aside from the Popular Choice Award, an expert judging panel will select winners for the First, Second, and Third Prizes, five Honorable Mentions, and a Large Organization Recognition Award. A total of $45,000 is available in prizes. The expert judging panel includes such technology gurus as Craig Newmark of Craigslist, Kannan Pashupathy from Google, and Ory Okolloh, co-founder of Ushahidi. Apps were also submitted by large technology companies, although these cannot be considered for prizes.
So go ahead, vote for your favorite and share in the comment section below what which app you voted for and why.
University or college students located worldwide may participate in the African Stock Investment Competition (ASIC). Sponsored by Afribiz, Africa investor, South African Chamber of Commerce in America, and Universal Creativ Solutions, the ASIC offers students who are at least 18 years of age the opportunity to learn firsthand about African capital markets. For the 2011 competition, U.S. students will have their first opportunity to gain an inside look at emerging market stock exchanges in Africa, while competing to win cash and prizes by building the best performing stock investment portfolio.
The ASIC website explains the two levels of competition. In the ASIC Level 1 Individual Competition, a series of quizzes are conducted February 2011 through May 2011. For each quiz, students who take the quiz and score 100 percent will be placed in a pool to receive a prize. Awardees are chosen randomly from the pool of students who scored 100 percent on the quiz. At least one awardee will be chosen for each quiz.
In the ASIC Level 2 Team Trading Competition, teams of students consisting of two to four students compete against each other by developing high growth stock portfolios of six months (March 1 through September 30, 2011) on a virtual trading platform (university.jse.co.za), which shadows the Johannesburg Stock Exchange. No real currency or assets are involved. The teams that have the three best performing portfolios (based on rules guiding the virtual trading platform) as of September 30, 2011 will be awarded first, second, and third place respectively.
For each quiz competition in ASIC Level 1 Individual Competition, awardee(s) will receive an undisclosed prize with a value of less than $100.00. For ASIC Level 2 Team Trading Competition, winning teams receive the following cash prizes:
1st Place Team – $1,500.00
2nd Place Team – $1,000.00
3rd Place Team – $500.00
Registration deadlines for the ASIC Level 1 Individual Competition and ASIC Level 2 Team Trading Competition are 20 February 2011 and 26 February 2011, respectively. Additional information may be found at www.africanstockcompetition.com/competition-registration.
During a recent trip to Washington, DC, I had the pleasure of serving as a panelist at the Global Social Entrepreneurship Forum hosted by the Carey International Business Career Club at Johns Hopkins University. Moderated by James Calvin, Ph.D., Associate Professor at the Johns Hopkins Carey Business School, my fellow panelists included Drew Durban, Co-Founder of Anza Technologies, Neelima Grover, Founder and Chairman of The QED Group, and Barbara Moller, President and Founder of Paper to Pearls. I enjoyed the conversation with the attendees and my fellow panelists and while several good points were made during the course of the forum, there are a few worth mentioning in this blog.
As a result of the difficult economic climate, many business students are considering starting their own business ventures upon graduation. While it may be obvious to most people, it is important to focus a business on an area where the entrepreneur is passionate and finds motivating. Many people have the misconception that business is not personal. They are grossly incorrect. When you immerse yourself in your venture by working 16 hours a day, seven days a week and sacrifice your time with your friends and family, business IS personal. An entrepreneur will fail if they cannot find the passion and motivation to sustain their energy, efforts, and carry themselves through the tough times (and there will be a lot of rough spots where you question the reasons for starting your venture, finding value in your efforts or managing the stress caused by unforeseen viability and success of the venture).
Since the focus of the forum was on social entrepreneurship (I prefer the term “responsible business”), the panelists were asked about the challenges of doing business in developing nations, some of which have serious corruption problems and lack of governance or physical infrastructure. The panel uniformly replied the importance of a vast knowledge of the local culture and unique nuances. I have conducted business worldwide and I learned early in my career that every country possesses an uniqueness about it. As an entrepreneur, my operational strategy, product or service and value proposition must take the unique cultural nuances into consideration.
The financial bottom line is not always the primary focus of doing business in developing markets; social return on investment (SROI) often takes an essential role in defining the value of a business venture. The Wikipedia definition of SROI “is a principles-based method for measuring extra-financial value (i.e., environmental and social value not currently reflected in conventional financial accounts) relative to resources invested. It can be used by any entity to evaluate impact on stakeholders, identify ways to improve performance, and enhance the performance of investments.” While businesses adhering to responsible practices are mindful of the SROI, they tend to neglect the financial ROI. In other words, businesses, for-profit and nonprofits alike, must establish a revenue model that will produce a steady stream of cash flow to sustain operations and promote business growth.
A key mistake many businesses make is their failure to differentiate themselves from the competition or invest in a comprehensive branding and marketing strategy. I am in the early stages of launching a business venture where there currently exists little competition. However, I have to assume the marketplace will see an influx of competitors and I will need to convince my customer that my service is superior. This cannot be done through innovation alone. It is essential to create brand value and effectively market this brand to current and potential customers alike.
Lastly, it takes a highly motivated and well-organized team for any venture to succeed. From my experiences with for-profit and nonprofit ventures, I learned the importance of having the right people involved who believes in the business mission, supports the objectives, assists in the creation of the product or service, and understands the value proposition. In addition to leading the right team, it is essential to have good mentors and advisors whom an entrepreneur can receive feedback to their ideas or provide objective advice that will help the entrepreneur succeed. Furthermore, in my ventures, not only have I learned to utilize my strengths, it is equally important to realize my weaknesses and find people (mentors, managers or support staff) that will provide a unique value to the business team.
I invite you to contribute your own ideas or share your experiences in the comment section below.
Approximately 85 percent of Haïtians households own a mobile phone, but very few have access to banking or lending services. On December 3, 2010, wireless operator Voilà, a subsidiary of Bellevue, Washington-based Trilogy International Partners, and Haïti-based Unibank has launched T-Cash, Haïti’s first mobile money solution. The press release says that this service is a “first-of-its-kind service in Haiti” serving hundreds of thousands of the unbanked Haïtians in regions unreached by traditional financial service providers. Accessible through their Voilà mobile phone, Haïtians will now have access to a full suite of banking and m-commerce services. “By leveraging Unibank’s nationwide network of merchants and tapping into Voilà’s base of over 1 million subscribers, this partnership creates a valuable financial ecosystem with the potential to impact millions of Haitians throughout the country. In partnership with applications service provider MoreMagic, Voilà and Unibank have delivered their mobile payment solutions in a secure, hosted, and fully managed environment.”
With T-Cash, Voilà subscribers throughout Haïti now have the ability to complete domestic peer-to-peer money transfers, bill pay, payroll services, and expanded mobile commerce capabilities. An initial and unique feature of the T-Cash service will be a ‘mini wallet.’ The mini wallet allows Voilà subscribers to immediately activate the T-Cash service and store up to 2500HTG (US$62.50) by entering a code on their Voilà mobile phone. This easy to use, mini wallet feature will allow for rapid, widespread adoption and access nationwide. By January 2011, Voilà and Unibank are preparing to establish over a thousand affiliated merchants and cash in/cash out locations throughout the country.
In a country that has been ravaged by natural disasters such as hurricanes and flooding, and the devastating earthquake on January 12, 2010, I am very encouraged to see the private sector implement a solution to provide banking services for Haïtians through mobile technology. Households with access to savings accounts are more likely to invest in education, increase productivity and income, and reduce vulnerability to illness and other unexpected events. Through a mini wallet and other m-commerce services, Haïtians have access to safe and affordable savings accounts, credit facilities, and the ability to conduct commercial transactions, which are necessary to achieving sustainable development.
My previous entry presented various statistics explaining that while very few poor people have access to savings accounts, there is a strong desire to utilize such financial schemes. It is estimated that 3 out of 4 adults in developing and middle income countries do not have bank accounts and worldwide, it is the poor, women, and rural residents who are the least banked. Only about 10 percent of the 2.5 billion people living on less than $2 per day have access to a bank account. Rather than illustrating a dire picture, these statistics demonstrate the opportunity that exist in broadening savings services to a large segment of the most underserved people worldwide; otherwise known as financial inclusion. (Photo: Bill & Melinda Gates Foundation)
At the Global Savings Forum in Seattle, the first global gathering focused on the role of savings in the developing world, the Bill & Melinda Gates Foundation pledged $500 million over the next five years to expand savings. Foundation co-chair Melinda French Gates noted that a package of six new grants totaling $40 million are part of the $500 million pledge. The grants support projects and partnerships to improve access to savings and other financial services, including:
Expansion of bank and microfinance services to include savings accounts;
Implementation of new approaches to reach the poor with savings, such as branchless banking and mobile money; and
Research to identify how people use formal and informal financial tools, including savings, credit, insurance, and payment services, and to analyze the impact of financial services on the lives of the poor.
“Savings doesn’t just help people mitigate the risks posed by a medical emergency or a bad crop,” said Mrs. Gates. “It also gives them the ability to marshal their resources to build something better for themselves and their children. It allows them to fund their own businesses, to look ahead with confidence. Savings helps families to take the giant leap from reacting to events to planning for a healthier, happier future.”
Explained by a Gates Foundation press release, “Technologies such as mobile phones are already providing safe, reliable, and easy options for people to access financial services. Sixty-nine percent of the developing world already has a mobile connection, and this number is expected to climb to 98 percent within five years.”
Emerging technologies such as mobile phones and innovations that enable banking services to be provided in post offices, neighborhood shops, and other convenient locations are creating a historic opportunity to deliver affordable, quality financial services to the doorsteps of the world’s poor. In Kenya, a service called M-PESA allows nearly 12 million people to transfer money and link to bank accounts using mobile phones. In Mexico, a network of government-operated convenience stores is serving as a platform to offer banking services to the rural poor. In Malawi, a bank is reaching thousands of first-time banking customers by mounting mobile banks on the back of pickup trucks. Here is a video detailing the Foundation’s program of promoting financial inclusion in Mexico:
From November 16-17, 2010, the Seattle, Washington-based Bill and Melinda Gates Foundation hosted the Global Savings Forum, the first global gathering focused on the role of savings in the developing world urging urged leaders in government, banking, mobile communications, and international development to work together to build a new kind of financial infrastructure to bring savings to the poor. The conference produced several interesting statistics about the unbanked—people who do not have access to a savings account.
It is estimated that 3 out of 4 adults in developing and middle income countries do not have bank accounts and worldwide, it is the poor, women, and rural residents who are the least banked. Only about 10 percent of the 2.5 billion people living on less than $2 per day have access to a bank account. Sub-Saharan Africa is the least banked region in the world with 80 percent of its population lacking access to a bank account. This is followed by the Middle East/North Africa and Latin America/Caribbean at 68 and 65 percent, respectively.
There is a misconception that poor people do not save. The truth is that poor people actively save in cash and through informal mechanisms, but these tools inadequately meet their specific needs. According to a series of studies, over the course of a year, a typical poor household in Bangladesh, India or South Africa uses no less than four and typically closer to ten types of financial instruments. Rotating Savings and Credit Association (ROSCA) membership rates among adults have been estimated at between 50 and 95 percent of adults in Cameroon, Côte d'Ivoire, Democratic Republic of Congo, Gambia, Liberia, Nigeria, and Togo and similar group savings schemes are widespread outside of Africa as well. (ROSCA is a group of individuals who agree to meet for a defined period of time in order to save and borrow together.) Furthermore, a study of 1,500 people in Uganda showed that 99 percent of respondents failed to reach their savings goals when using informal methods, either because the money was stolen or lost, or because they were too tempted to spend the money when it was stored as cash in their home.
The conference presented overwhelming evidence that savings accounts are in high demand by poor people. Interestingly, savings accounts are being engaged at rates up to 12:1 compared to loans, even when both services are available from the same institution. In Uganda, for example, 43 percent of people said a savings account is their greatest financial need compared to 31 percent who cited credit. A Consultative Group to Assist the Poor (CGAP) study of six microsavings-focused institutions also found rapid growth in savers. During a six-year time period, 20 million new accounts and $4.3 billion in savings volume were added, representing an increase of 87 percent and 71 percent respectively.
Several participants noted that safe savings options help people to manage risks, like illness, increase investment in livelihoods, and empower women. A study in the Philippines showed that access to certain savings products increased women’s economic empowerment, including decision-making power over purchases, family planning, and children’s education. Farmers who were given the option to put aside money toward the next planting season increased productivity, enhancing investments in farming inputs by 32-39 percent. A randomized control trial in Western Kenya found that women who had access to a formal savings account were able to save and invest 45 percent more in their businesses after six months, leading to increased purchasing power for food and personal expenditures. The same study revealed that women with formal savings accounts were better able to afford emergency health services without depleting the money invested in their businesses. For most poor households, using savings to pay for large expenditures is cheaper and more efficient than taking a loan. For instance, even microfinance institutions (MFIs) often charge over 50 percent annual interest on loans. Fees for small deposit accounts, however, often equate to zero or positive interest payments to savers.
Poor households with access to savings accounts are more likely to invest in education, increase productivity and income, and reduce vulnerability to illness and other unexpected events. The challenge remains that very few MFIs offer savings accounts, and more than 90 percent of the world’s poor still lack access to financial services and resort to risky, expensive, and inefficient ways to save. In my next blog entry, I will present a number of solutions discussed during the two-day forum that will increase savings mechanisms to a large underserved market.
On October 19, 2010, the eve of World Statistics Day, the Geneva, Switzerland-based International Telecommunication Union (ITU) released a report, The World in 2010: ICT facts and figures, explaining the number of Internet users worldwide doubled in the past five years and will surpass the two billion mark in 2010. There will be an estimated 226 million new Internet users in 2010, with a majority, 126 million, coming from developing countries. China is the largest Internet market in the world with more than 420 million Internet users.
Where people are accessing the Internet is different when comparing industrialized and developing countries. For example, the number of people with Internet access at their residence increased from to 1.6 billion this year from 1.4 billion in 2009, with 65 percent of these in developed countries and only 13.5 percent in developing countries where access to the Internet in schools, at work and public locations is crucial. By the end of 2010, 71 percent of the population in industrialized nations will be online, compared to 21 percent in developing countries. Regional differences are significant: 65 percent of Europeans are on the Internet compared to only 9.6 percent of Africans.
There is a growing demand for higher-speed broadband connections to access rapidly increasing high-bandwidth content and applications on the Internet. The press release explains that the ITU, the leading United Nations agency for information and communication technology issues, “considers broadband as a catalyst for growth. Recently, ITU and UNESCO launched the Broadband Commission for Digital Development that aims to promote the adoption of broadband-friendly practices and policies worldwide. ITU Secretary-General Hamadoun Touré says, ‘Broadband is the next tipping point, the next truly transformational technology. It can generate jobs, drive growth and productivity, and underpin long-term economic competitiveness. It is also the most powerful tool that we have at our disposal in our race to meet the Millennium Development Goals, the deadline for which is now just five years away.’”
Moreover, according to ITU, “Over the past year, there has been strong growth in fixed broadband subscriptions. By the end of 2010, fixed broadband penetration will reach 8 percent globally. But penetration levels in developing countries remain low: 4.4 subscriptions per 100 people compared to 24.6 in developed countries.”
While high-speed Internet is still out of reach for many people in low-income countries, mobile telephony is becoming ubiquitous, with access to mobile networks now available to over 90 percent of the global population. ITU’s new data indicate that among the estimated 5.3 billion mobile subscriptions by the end of 2010, 3.8 billion will be in the developing world. Furthermore, 940 million of the 5.3 billion subscriptions will be for 3G services.
Access to mobile networks is now available to 90 percent of the world population and 80 percent of the population living in rural areas and people are moving rapidly from 2G to 3G platforms, in both developed and developing countries. In 2010, 143 countries were offering 3G services commercially, compared to 95 in 2007.
The ITU report says mobile cellular growth is slowing worldwide. In developed countries, the mobile market is reaching saturation levels with on average 116 subscriptions per 100 inhabitants at the end of 2010 and a marginal growth of 1.6% from 2009-2010. At the same time, the developing world is increasing its share of mobile subscriptions from 53 percent of total mobile subscriptions at the end of 2005 to 73 percent at the end of 2010. In the developing world, mobile cellular penetration rates will reach 68 percent at the end of 2010 - mainly driven by the Asia and Pacific region. India and China alone are expected to add over 300 million mobile subscriptions in 2010. In the African region, penetration rates will reach an estimated 41 percent at the end of 2010 (compared to 76 percent globally) leaving a significant potential for growth.
According to the World Health Organization (WHO), nearly two million people die prematurely each year because of exposure to smoke from traditional cookstoves and open fires; that is nearly one death every 16 seconds. Furthermore, three billion people, nearly half of the world’s population, are affected by exposure to smoke from traditional cookstoves and open fires and WHO estimates that exposure to smoke from traditional cookstoves accounts as one of the top five worst overall health risk factors in developing countries. Given the adverse impact of cookstoves and open fires predominately on women and children, I am encouraged by the formation of the Global Alliance for Clean Cookstoves, a US$60 million dollar public-private partnership to save lives, improve livelihoods, empower women and combat climate change by creating a thriving global market for clean and efficient household cooking solutions.
The announcement of the Alliance’s formation was made by United States Secretary of State Hillary Rodham Clinton at the Clinton Global Initiative’s 2010 Annual Meeting. Outlining the problem, Secretary Clinton said, “As many as three billion people are gathering around open fires or old and inefficient stoves in small kitchens and poorly ventilated houses. Many of the women have labored over these hearths for hours, often with their infant babies strapped to their backs, and they have spent many more hours gathering the fuel. The food they prepare is different on every continent, but the air they breathe is shockingly similar: a toxic mix of chemicals released by burning wood or other solid fuel that can reach 200 times the amount that our EPA considers safe for breathing.” Moreover, explained Mrs. Clinton, “As the women cook, smoke fills their lungs and the toxins begin poisoning them and their children. The results of daily exposure can be devastating: Pneumonia, the number one killer of children worldwide, chronic respiratory diseases, lung cancer, and a range of other health problems are the consequence.”
The Alliance’s ‘100 by 20’ goal calls for 100 million homes to adopt clean and efficient stoves and fuels by 2020, which will be achieved by a collaborative effort among public, private, and non-profit partners to help overcome the market barriers that currently impede the production, deployment, and use of clean cookstoves in the developing world. Led by the United Nations Foundation, the Alliance will bring together leading foundations, non-profit organizations, academic institutions, corporate leaders, governments and UN agencies to help overcome current barriers and stimulate a thriving global market for clean cookstoves.
Why launch this initiative in 2010? The Alliance explains that several factors are aligning as never before to put the sector within reach of a “tipping point” for adopting clean cookstoves at scale. These factors include:
Recent advances in clean cookstove design, testing, and monitoring;
Compelling new research on the health and environmental benefits of clean cookstove;
Recent commercial success and development of a number of business models in the field;
The advent of national cookstove programs in India, Mexico, Peru and elsewhere;
The increasing need for effective near- and long-term action to address climate change at the local and regional level; and
The potential for carbon finance to fund stove initiatives at greater scale.
The purpose of the TEDxChange forum was to promote public awareness of and support for the Millennium Development Goals (MDGs), which range from halving extreme poverty to halting the spread of HIV/AIDS and providing universal primary education, all by the target date of 2015. The MDGs are to be achieved by a collaboration of all the world’s governments and nongovernmental organizations (NGOs). The September 20, 2010 forum included a few speakers and a performance by Bajah + The Dry Eye Crew, a hip-hop group originally from Sierra Leone that is known for speaking out against political and social injustices. Melinda Gates, co-chair of the Seattle, Washington-based Bill and Melinda Gates Foundation, was one of the speakers and there are certain aspects of her speech worth discussing on this blog.
Mrs. Gates spoke about the worldwide presence of Atlanta, Georgia-based Coca-Cola Company, even in most underdeveloped regions of the world. This is in stark comparison to the items underserved populations are lacking such as condoms, vaccinations for curable diseases, and educational materials for malaria prevention and prenatal care. "Coke is everywhere," said Mrs. Gates. “In fact, when I travel in the developing work, Coke feels ubiquitous." Moreover, "Coke's success makes you wonder how they are able to get to these far-flung places." If Coke is so successful in delivering their product worldwide, "then why can't governments and NGOs do the same thing?”
Mrs. Gates explained that if the international development community wishes to achieve the Millennium Development Goals prescribed by the United States by 2015, “we need to learn from the innovators and those innovators come from every single sector. I feel that if we can understand what makes Coke ubiquitous, we can apply those lessons to the public good. Coke’s success is relevant because if we can analyze and learn from it, then we can save lives.” Mrs. Gates continued to explain that there are three things the international development community can learn from Coca-Cola: “Real-time data and immediate feed it back into the product, tap into local entrepreneurial talent, and they do incredible marketing.”
Coca-Cola takes immediate data to measure progress. This is different to development organizations where evaluation comes at the very end of the project and by then, it is too late to use the data. Mrs. Gates uses bowling in the dark as an example of the flawed system governments and NGOs use, “You roll the ball, you hear some pins go down, it’s dark and you cannot see which pins go down until the lights come on, then you see your impact. Real-time data turns on the lights.”
In order to reach distant markets in developing nations, Coca-Cola recognized that it had to change its distribution model that worked so effectively in industrialized nations. Observing that some people in Africa were buying Coca-Cola products in bulk and reselling it in rural villages, the beverage company created 3,000 created micro-distribution centers in Africa since 1990, which now employs 15,000 entrepreneurs. In Tanzania and Uganda, micro-distribution centers represent 90 percent of Coka-Cola sales.
How can governments and NGOs learn from Coca-Cola? "Governments and NGOs need to tap into that local entrepreneurial spirit as well because locals know how to reach the very hard to serve places and they also know their neighbors and what motivates them to make changes," remarked Mrs. Gates. She cites Ethiopia’s new health extension program as an example where the Ethiopian government noticed that so many people resided long distances from medical centers that prevented them from seeking immediate medical care. In 2003, using a similar model used in the Indian state of Kerala, the Ethiopian government trained 35,000 health extension workers to deliver medical care directly to the people in rural areas. In five years, this program increased the number of workers from one per 30,000 to one worker for every 2,500 Ethiopians.
Mrs. Gates continued to explain that "health extension workers can help with so many things whether it is family planning, prenatal care, immunizations for the children, or advising the woman to get to the facility on-time for an on-time delivery. That is having real impact in a country like Ethiopia and it's why you see their child mortality numbers coming down 25 percent from 2000 to 2008. In Ethiopia, there are hundreds of thousands of children living because of the health extension program."
With respect to marketing, Coca-Cola's successful strategy lies in localizing their brand and advertising on a country or region basis. I have witnessed this during my travels. Whether it is in Uganda, Brazil or China, Coca-Cola creates advertisements using local people and in the local language, which gives the impression that the beverage company is locally-based. Everyone knows that Coca-Cola is a large American conglomerate, but their marketing strategy reflects a localized feel to the product. Governments and NGOs need to incorporate similar marketing strategies whether it is condom distribution to eradicate AIDS/HIV or promoting sanitary behavior like washing hands after defecating or linking toilets to courtship like a northern India state did to save lives caused by dysentery. Mrs. Gates said that if governments and NGOs “begin to understand what people want in health and development, then we can change communities and whole nations.”
You can watch the Mrs. Gates' speech in its entirety in the video below or through this web link:
This past spring, I observed the tradeshow and final round of the 12th Annual Harriet Stephenson Business Plan Competition hosted by my alma matter, Seattle University (SU). 23 teams competed for over $20,000 in prize money. I was very impressed by the broad spectrum of sectors represented and the creativity of the business strategies presented. There are certain observations from the presentations that are worth discussing.
I receive plans from businesses at different stages looking for funding and many of these plans lack a comprehensive competitive strategy. The contestants at this year’s competition are no exception. Too many businesses outlined competitive strategy by saying “there are no competitors.” As an entrepreneur and business advisor, I promise you that no matter how unique a business idea may be, someone out there in the world is thinking the same thing. I recall when Yahoo! Inc. launched its web portal in 1995 when very few competitors existed. When Yahoo became a publicly-traded company in 1996, the Sunnyvale, California-based company was in the position to be the market leader for years to come. Then a little unknown company called Google Inc. was launched in 1998 and within just a few years, Yahoo quickly lost its competitive advantage to the Mountain View, California-based company. Yahoo continues to struggle in finding its niche in the marketplace. (For disclosure purposes, I am a shareholder of Google.)
Another example I like to use in how a market leader can find itself in trouble by losing sight of its competitive advantage is Palm, Inc. While Palm was not the first to introduce touchscreen smartphones, it was the first to produce this innovative product at a competitive price. When I purchased my Palm Treo in 2005, there no product such as the Apple iPhone or Google Droid (Research in Motion’s BlackBerry was Palm’s primary competitor in the smartphone sector at the time). Fast forward five years and not only did Palm not stay ahead of the competition, but the Sunnyvale, California-based company was acquired by Hewlett-Packard on July 1, 2010.
The point here is that while an entrepreneur may think his or her business idea is truly unique, the reality is that a comparable service or product will enter the market sooner than most entrepreneurs realize or anticipate. How will your company remain a leader as competitors enter the market?
Another common mistake is that some competitors possessed gaps in their management team. I was mystified to see a few contestants lacking people in key roles such as Chief Executive Officer or General Manager. I understand that some people may be the creative leader of the company, how can they expect to receive financial support from an investor if there is no one to lead the company? I can attest that value of any company is not the service or product per se, but the people leading the day-to-day operations. One point I often stress in my entrepreneurship seminars is that investors invest in people more than they invest in ideas. Whether we realize it or not, each one of us has million (or billion) dollar ideas. However, very few people in the world have the ability (and a little luck) to implement their ideas.
Each team presenting at the tradeshow provided a one-page handout outlining the company’s mission, deliverable, value proposition, financial strategy including amount sought from investors, and other pertinent information. This is a small issue, but I am surprised by the number of competitors who failed to provide their contact information (phone number, email address or website) on their handout.
I am pleased to see Seattle University support entrepreneurs through this worthwhile competition. Information about the 2011 competition may be found here. Any enrolled SU students or alumni can participate in the competition and a team participating in the competition can consist of one or more contestants and include non-students. However, there must be at least one SU student or alumnus on each team. The winners of the 2010 competition are:
