Source: http://tvtropes.org/pmwiki/pmwiki.php/Main/WantedPoster

During one of the lectures of Open and User Innovation, a group of students gave a presentation about competition. The competition here were competitions held by firms in order to find an innovative solution to a problem. I always thought these competitions were purely beneficial to the firm and were not something that had to put that much effort into. During the presentation I found out I was very wrong.

Holding a competition requires a firm to take many measures into account and several sorts of costs need to be incurred. Examples of costs that need to be incurred are: the cost of releasing data, the cost of the resources that need to be provided to the contestants, the cost of testing the hundreds of solutions provided by the participants, the risk of rivals gaining an advantage based on the information you share with the participants and costs incurred by controlling the entire competition.

In order to clarify just how much effort goes into hosting a competition, our teacher Serdar Temiz gave an interesting example that I wanted to share here. This was based on an example the presenting group of students gave during their presentation. The example he gave was a sort of competition through crowdsourcing. This form of crowdsourcing was used a long time ago. The competition I am talking about here takes place in the Wild Wild West, and the competition is the search for bad guys through WANTED posters. In this case, the sheriff would ask the crowd to find a person, rendering it a form of crowdsourcing. Since a reward is offered to the person who first finds them, it can also be considered a competition. The following factors were named for the sheriff to take into account when holding this competition:

  • Price setting: is the offered reward high enough in the eyes of the people to participate in the search?
  • Price justification: is the offered reward accurate for the crimes this person committed? Do you charge the same for someone who robbed a bank as for someone who robbed a grocery store?
  • Awareness: the sheriff needs to find a way to spread the word about the competition, for example, the posters, then these need to be hung up in the correct places.
  • Boundary: how far does the sheriff need to put up the posters? What regions could the bad guy be in and what is too far
  • Registration: there need to be people answering the phone about the enquiries made by people stating they found the bad guy.
  • Analysis: the sheriff needs to consider whether he has the right systems to analyse all the enquiries. He cannot simply send his men to wherever a call comes from, then there will be no resources left.
  • Description: how specific does the sheriff need to be in the description? If he simply offers 1000 dollars for a thief, then people will bring by their neighbour’s kid who once stole an egg from them and demand they get the reward.
  • Information leakage: what if they are too specific? And a neighbouring county sheriff wants to catch this bad guy themselves in order to get a good reputation. But if you give too little information, the people might not be able to identify the bad guy.

For me this example was a nice, simple way to discuss the problem. I had never thought about a competition in this way, nor did I realise that there were so many factors to consider when hosting one. It really clarified the factors that need to be taken into account, and I hope it can do the same for other people reading this!

//Lynn Reichenfeld

Venture Cup is a yearly competition for startups with no commercialized revenues exceeding 500 000 SEK. I learnt about this competition through an announcement made by KTH Innovation (turns out there are some previous post in this blog about this competition). The event I attended to was the East’s regional final and it was held last Thursday, May 16th, with 12 nominated startups amongst the hundred that had participated.

Prior to the pitches from the nominees there was a mingle in which I discussed with 2 of the startups about their projects. Both had a similar story, they had been created by groups of students, but what caught my attention is that the two of them had added business developers to their teams, so the founders of these companies were more centered in the technical aspects of the company than in the business side.

Each startup performed a 2 minutes pitch on stage, explaining their idea. I must confess that none of them was impressive or particularly horrible, although obviously some were more clear explaining their idea than others, but in all cases there was a scent of blur in the descriptions of their ideas. The speakers were all obviously nervous and even one of them suffered a brain freeze that made her pull out her notes to finish the pitch. The pitches were followed by a Q&A from the jury, who was not particularly tough with the questioning because, as they explained, there had been a previous selection process in which the participants had to pitch their ideas and were asked exhaustively for the details of their business model. To finish, there was a recap of all the business idea with a 1 minute video from each startup, with the founders explaining -again- their business idea. It struck me how oddly familiar these videos were to what we have done in class, as they were all in the “talking head” format, with no animations or showcases of the products, although I assume that this was due to some requirement from the competition.

As an interesting note, one of the members of the jury mentioned that she is a business angel at STOAF, a Swedish investment company with almost 50 business angels. If you are looking for finance for your startup you should probably check them out: www.stoaf.se

More info about this competition at www.venturecup.se

— Joaquin Sanchez-Valiente

joaquins@kth.se | LinkedIn

I read an interesting article in The New York Times:


I think it is a trend that is far away from changing its direction of increasing. But does the online marketing  make it easier to make business? Or is it the opposite, since it is easy to enter the market the competition gets higher and higher and thus it is more difficult to survive? Possibly is a little bit of each?