Inspiration for the University of Memphis FedEx Institute of Technology Business Plan Competition

In 1965, Yale University undergraduate Frederick W. Smith wrote a term paper about the passenger route systems used by most airfreight shippers, which he viewed as economically inadequate. Smith wrote of the need for shippers to have a system designed specifically for airfreight that could accommodate time-sensitive shipments such as medicines, computer parts and electronics.

Fast-forward to 1973, just eight years later, when Smith's idea became a reality with Federal Express, the first company to offer overnight delivery in the United States.

It is this rich history of entrepreneurship that gives life to an event designed to exhibit the breadth of talent that is both abundant and, in many cases, unrecognized in the Mid-South region. Competitions can discover, cultivate, and test that talent, paying dividends to their patrons and to the larger communities in which they are held. Ideas that would have remained undiscovered are nurtured and developed and used to launch successful companies. Business plan competitions are thus an innovative approach to sparking economic development and innovation, valuable either by themselves or as part of a broader development plan.

Even though business plan competitions have traditionally occurred in academic settings they have supported substantial economic development as well. MIT’s 50K Challenge has facilitated the birth of over 60 companies with an aggregate value of over $10.5 billion dollars. These companies have generated over 1800 jobs and received $175 million dollars in venture capital funding.

A key component to running a successful competition is to give participants financial incentives. The competitions conducted around the country suggest that the prize money be significant, perhaps even equivalent to a participant’s annual salary. One competition offered a white-collar worker’s average monthly salary to the originators of the ten best ideas in phase one of the competition and a full year’s salary to the overall winner. In many competitions, venture capitalists who act as evaluators go on to finance some of the businesses proposed by participants. This is obviously a huge benefit to the recipient company, but also an economic benefit to the community.

Business plan competitions also afford opportunities for networking, as well as a method to facilitate access to supporting infrastructure for start-up companies, such as inexpensive office space and local patent-licensing offices.