By John Gallagher
Detroit Free Press.
WWR Article Summary (tl;dr) When it comes to the topic of women entrepreneurship, the subject of “pitch competitions” is increasingly becoming part of the conversation. Andrea Dickson, a veteran of these pitch events adds, “The advantage to participating in pitches is they are efficient. Many people gather in one spot. That is a networking opportunity hard to duplicate,” she said. But no one should ever take the event lightly. “Prepare thoroughly, otherwise stay home”
Detroit Free Press
If there’s anyone who knows the ups and downs of pitch competitions where entrepreneurs vie for start-up cash, it’s Jess McClary.
Since launching McClary Bros. line of drinkable vinegar cocktail mixes in 2012, McClary has competed in several pitch events including the biggest one of all last year — the “Shark Tank” television show.
So far, she’s zero for the season, never winning a single one, rejected by Mr. Wonderful and other sharks and judges in other competitions. But she said the exposure, feedback, and experience has provided more than enough payback.
“I think they’re a great way to make sure that you know your product inside and out and the market you’re selling to, your customers, your competitors,” she said last week. “And a lot of times you get feedback maybe in a way you hadn’t considered before.”
In and around Southeast Michigan, start-up competitions have become almost weekly events.
At the Detroit Regional Chamber’s Detroit Policy Conference late last month, four start-up entrepreneurs competed for a place in the finals at the Chamber’s Mackinac Policy Conference in May. At those finals, Daymond John of “Shark Tank” will help pick the ultimate winner.
Other local pitch events include the annual Hatch Detroit and Accelerate Michigan contests, as well as NEIdeas and Motor City Match that award cash and other services. The formats vary, but all feature entrepreneurs vying for cash, mentoring, and public visibility from sponsoring organizations.
Pitch competitions are thus part of the evolving entrepreneurial ecosystem developing in metro Detroit. The Southeast Michigan regional economy has been morphing from a 20th-century model based on giant corporations to a more nimble 21st-century model based on innovation.
McClary’s company is like many of metro Detroit’s entrepreneurs, working in the food and drink “space” offering handcrafted small-batch drinkable vinegars. More commonly referred to as “Shrubs”, drinkable vinegars are a Colonial-era drink mixer.
McClary and her small staff blend organic, unpasteurized apple cider vinegar with seasonal ingredients and organic cane sugar to produce a drink readily mixed with spirits or fruits for a cocktail or shrub soda.
Taking time away from developing her business to prep for a pitch event can be daunting.
“It can be really challenging stopping running your business day to day and you switch gears to really focus on just studying information” for the competition, she said. “Sometimes that’s hard to be able have your team support you enough so that you can step away from that.”
And, too, entrepreneurs have feelings just like anybody else, feelings that might be bruised in a tough competition.
“You’re putting yourself out there hoping for the best,” she said, “hoping that people buy in. If they don’t that can be a little disappointing. It can be a little disheartening.”
But the upside makes it worthwhile even if you lose the competition, she said. For one thing, the publicity McClary garnered from her Shark Tank appearance drew in significant new investors. Her sales have jumped significantly, too, and she now sells her products in more than 600 stores in 26 states. And there were other benefits, too.
“Having to do a pitch forces you to make it very clear and succinct,” she said. “You get better talking about your product and public speaking in general which can be a challenge for a lot of people. You have to know so much about your product and deliver it so quickly that it helps you to really understand your market, your competitions and the best way to be putting your product out there.”
Andrea Dickson, president, CEO and co-founder of the medical device startup ENT Biotech Solutions and a veteran of pitch competitions, advises entrepreneurs entering contests to “strike the right balance between being passionate but remain credible.”
“The advantage to participating in pitches is they are efficient. Many people gather in one spot. That is a networking opportunity hard to duplicate,” she said. But no one should ever take the event lightly. “Prepare thoroughly, otherwise stay home,” she advises other entrepreneurs.
Judges in these competitions say they look for more than a compelling idea. They also want to see a spark that can translate into real-world results.
“Good ideas are actually quite common. Much rarer is the individual, group or team that can actually make it happen,” said Gabe Klein, a partner with the investment firm Detroit Venture Partners and a judge in the Detroit Policy Conference competition.
At the Detroit Policy Conference, presenters included four start-ups, all of which showed the youth, vitality and technical expertise common to start-ups that advance in pitch competitions.
So evenly matched were the four teams that Dennis Archer Jr., head of the judging panel and chairman of the chamber’s 2016 Mackinac Policy Conference, said later of his fellow judges, “We were supposed to sit in a room for maybe five minutes and we were in there much longer because it was a tough decision.”
The four presenters included Detroit Ento, which launched last year, a three-person team that produces protein from insects such as crickets for use in human food and animal feed, grinding up the bugs to powder to be mixed with other ingredients.
Other presenters included Boots on the Ground, which hopes to employ veterans to manufacture boots; Flash Delivery, which delivers restaurant meals and groceries to customers in metro Detroit; and Pro.up, which connects high school students with internships, training programs and other opportunities for advancement.
The judges liked all four start-ups, but somebody had to win, and that turned out to be Detroit Ento. Archer said judges picked Detroit Ento in part because founder Anthony Hatinger and his partners had agricultural background as urban farmers and a good sense of the potential market for insect protein. Indeed, that market is just beginning to emerge internationally.
“We think this business has a tremendous opportunity to scale,” Archer said.
Klein agreed, calling the global market for insect protein “a massive market that is just on the cusp of starting to develop. … The sky’s the limit, and they were able to convey to us that they really know their stuff.”
Archer and Klein said the three teams that did not win at the policy conference were all entering crowded markets.
But Detroit Ento, with its startling “bugs for breakfast” idea, seemed the most likely to hit the sweet spot of an emerging market.
Klein said judges in pitch competitions look for a certain thoughtfulness in entrepreneurs, a sense they have identified a problem or need, as well as a solution and a way to implement the plan. Judges also look at what kind of outside help entrepreneurs are getting.
“What network of advisers have they tapped into?” Klein said. “The ability to find those people is really important, and once you find them, get them to help you, because that’s a sign of good execution.”
The lesson for entrepreneurs entering pitch competitions: Have a solid, well-thought-out plan; heed the advice of your mentors, and think three steps ahead to how you’ll scale up in a market that may be filling up with competitors with similar ideas.