As the number of startup competitions rises in Asia Pacific – most centered around presenting a prototype or making a pitch to judges—more and more people in the tech ecosystem are questioning their usefulness. Some argue that these competitions distract founders from what they should be focusing on: actually building their business.
As someone who’s been participating in these competitions since 2012, I believe they do have merit for founders in particular and for the startup ecosystem-at-large. This goes for the competition losers just as much as it does the winners, and I speak from experience. I’ve lost many more times than I’ve won, and all instances have been equally helpful.
For entrepreneurs who are considering joining a competition, such as Ideaspace Foundation’s 2019 Startup Competition in the Philippines, here is how you can get the most value out of the event.
Use the event as a springboard to build momentum
Entrepreneurs can suffer from analysis paralysis, particularly at the ideation stage. We have many great ideas, but we put off pursuing any individual one because we try to build a 360-degree understanding of the particular industry or space. No great tech business was achieved through stellar market research alone, so we have to be biased toward action. We have to start, even when we have less than perfect information.
Startup competitions can get us over this hump. Because most have deadlines, entrepreneurs are forced to concretize their ideas into actual businesses. Some, like Startup Weekend, even force founders to assemble a team and create an elevator pitch laying out their future roadmap for the future, all in under 48 hours.
As an engineer who did not come from a business background, I found these artificial deadlines very helpful when making my taxi-hailing startup, Micab. Rather than spend countless hours researching the transportation industry, I was pressured into building a prototype, then an SMS-based solution, as the clock ticked toward the deadline. Founders should take this healthy pressure as a boost to build momentum for their startup.
Realize that face-time, not winning or losing, is what matters
Unfortunately, as most of these events have a winner at the end, many founders mistakenly adopt a false paradigm. They think that if they win the competition, it’s a validation of their business idea. If they lose, it’s a condemnation.
This kind of thinking is, of course, false. Many tech startups have won prestigious competitions only to stumble and fade away afterward. Others have lost competitions one after the other, before going on to become profitable, venture-backed companies. Here’s the truth: Only you can decide whether you are a winner.
How do you win? Because these competitions unite many people from across the industry – successful founders, investors, corporate sponsors, journalists, and more – you should maximize your face-time in meeting these stakeholders. Connecting and building valuable relationships with as many of these people as you can will generate enormous value for your company.
I lost a major competition in 2012, but the corporate organizers of the event ended up being a key partner for Micab. I have no doubt that other founders can create these relationships, so long as they get past the obsession over winning.
Know when to stop participating and focus
My one caveat: While I do believe that these competitions are helpful, there is a point in a startup’s growth when they experience diminishing returns in joining these. Later-stage founders, in particular, should carefully consider the opportunity cost of joining them, when they now have a fiduciary duty to their investors to focus on growing the business. Some opportunities, such as competitions relating directly to their space, may still be worthwhile, but the vast majority will only serve to distract.
While this might sound obvious, I have seen many startups fall into the trap of joining competition after competition, only to lose sight of their overall business. As with anything, you should participate in these competitions in moderation, and know when it’s time to stop. When you think about it, this is a good problem to have: You’ve graduated beyond the point where these events are helpful. Your fate is now completely in your hands.
Eddie Ybanez is the founder and CEO of Micab. Based in Cebu, he is a “hacker” by training and by heart.