It's No Contest

Entering a competition can be a launching pad for a startup.

Image: iStockphoto

It seems that every day, there’s a new call for entries in business-plan competitions, invitations to startup weekends, or incubator slots up for grabs. With all the activity around contests, should you consider entering your company?

“Betting on anything less than a sure thing, in terms of increasing your business, can be tough to justify. But the fact is that a contest may be just the jump-start your company needs,” writes Thursday Bram, a personal finance freelance writer, on American Express’ Open Forum.

Using contests to land future work can sound appealing to any startup, especially when marketing and advertising budgets are nonexistent. “Contests, challenges, and competitions can be effective in many industries in proving your expertise,” Bram explains. “Being able to label your company as ‘award winning’ can be useful in landing new clients, as can having contest entries that you can show off as a part of your business’s portfolio.”

But as with any business decision, beware of pitfalls. Not every client equates a contest win with skill. Some think a victory may be just luck—or worse, the result of connections and networking. Another big pitfall is that sometimes these contests can actually be scams or they may be run by unsavory characters who may cast your business in an unflattering light. Do your homework before entering, Bram and other experts urge.

Trust your gut, listen to your friends, and ask those who have won before, when it comes to entering.

In February, when I met the winners of British Airways’ Face of Opportunity contest, which flew 250 entrepreneurs to London and further destinations, I asked each one that I spoke to why they entered the contest. Many told me they heard about the opportunity from a friend or a business associate, and some even said they learned about it from a client who thought they would be a perfect fit.

One of the winners, Lynn Rossetto, is president of March Forth Kenya Kids, a nonprofit that brings music education to African children, helps teach them survival skills, and encourages them to pursue higher education. Rossetto said that she and her husband were researching funding options and stumbled upon the contest. “We thought it was a long shot, but we hoped that once we shared our story, we’d connect,” she told me, bleary-eyed, having just arrived at New York's JFK airport on the red-eye from Los Angeles.

Rossetto had no qualms about entering a contest run by a reputable company, especially once she read the testimonials from last year's winners. "For me it wasn't a question of can I afford to enter, especially since all we had to do was upload a video, there were no other financial costs involved," she said. "Rather, it was a question of: Can we afford not to jump on this opportunity?" We boarded the London-bound flight two hours later and Rossetto was off to Kenya for fundraising meetings the next day.

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