The Stories of Peter and Melissa: Connected Goal Posts
This article is a part of the book “Information Architecture & Entrepreneurship: Building Patterns for Successful Entrepreneurial Ecossytems.”
The Michigan Business Challenge is a yearly entrepreneurial competition at the University of Michigan. In Round 1 approximately 100 teams give a three-minute pitch to a panel of judges with four minutes of questions. Sixty teams advance to Round 2, and are whittled down to 16 to 22 teams that enter the semi-finals. In the semi-finals teams now have seven minutes to present their company’s market need, market size, and financial assumptions.
Twelve teams (four teams across three different tracks) advance to the finals. Finalists complete a full business plan and present their ideas for fifteen minutes to a new panel of potential investors. Three teams across three different tracks take home monetary prizes and boasting rights as one of the top startups in the university community. The entire process from initial application to the finales takes several months.
The MBC business competition offered an opportunity to see how different founders navigated the same requirements. I spoke with several founders as they progressed through the stages of the competition. Their stories revealed how incredibly influential information maps were to their eventual success or failure within the competition.
The two stories I share are of two entrepreneurs that began in the competition at very similar points in their start-up journeys in terms of the readiness of their product, their ages, and the amount of customer discovery they had done prior to the competition. The names of the individuals and their company names have been changed to respect their privacy.
Melissa was a solo founder and an MBA student who had worked on her company, which we will call Thistle & Rose, for several months. Her company was dedicated to bringing transparency to the funeral industry through the creation of a platform where people could easily see the various prices and packages at local funeral homes and choose the one which best fit their needs. Melissa had spoken to several customers in the previous months. She had initial website designs but had no developer to help her build this product.
Peter was an Urban Planning student with his real estate license and he set out to build a company we will call Build Analytics. Large businesses like McDonalds, Starbucks, Sweetgreen, have teams of analysts to understand foot traffic and nearby demographics to help them choose where they should locate new stores for the greatest return on their investments. Build Analytics enabled potential small, local business owners to gain this level of insight through the use of connecting several datasets like local income to an automated recommendation system. In bringing greater insight to local businesses, it would provide a more even playing field for both large and small businesses to compete.
Both of these founders were charismatic and good at pitching, had a large addressable market, and built relationships with potential customers. These attributes are likely factors that got both teams through Round 2 of the competition. Neither had a product built yet, so their success or failure was dependent solely on their business plans and their presentations.
Peter would not advance on, while Melissa would go on to the Impact Track finals. The difference in these two founders’ trajectories I do not believe rests in an innate ability one possesses that the other lacks, but instead had different information maps that impacted which resources they used and how they used them.
Peter lived in Detroit, and tried to schedule all of his classes and meetings on similar days so he did not need to commute more than he had to. Most of his classes were also on North Campus at the Taubman building. To help students with the Michigan Business Challenge several business school professors hosted workshops on understanding customer development, developing financial projections, and creating a captivating pitch presentation. Peter missed several of these presentations because he was not on campus. Other times, the distance from the Taubman building where the majority of Urban Planning classes are held felt daunting.
But crucially, Peter did not know that missing these supplementary classes would be extremely important to understand not simply basic business principles but what specifically judges wanted within this competition. The difference is subtle but important.
In a competition where students from a broad array of disciplines and differing levels of skill need to know everything about building a business, often students grapple with the question of how best they can use their time.
The answer for many students came through informal networks. No informal network in the business school was more immediately obvious than the “Winter Garden.” The Winter Garden was not a collection of trees and plants outside, but rather tables and couches inside.
Here many students who take classes at Ross congregate before or after class, to study, to host study groups and group projects, or to just hang out. Here many of the MBA students who participated in the MBC competition would naturally congregate. A conversation between two team mates might be heard by other current contestants or previous contestant, and often as not it would start a brainstorming session where people would share advice on how to best format templates or which supplementary sessions were most useful to go to.
Between missing the supplementary classes and not having this informal network of peer assessment and support, the business plan Peter submitted did not look as polished as his peers. In the presentation Peter gave, he used slightly different language than what business experts understand. Business experts generally understand whether an investment is good or bad based on a concept known as return-on-investment (ROI). Peter spoke about the potential for Build Analytics in terms of its potential to bring greater economic development to the City of Detroit. There was nothing Peter said that was necessarily wrong, but he presented his ideas in a way that was hard for potential investors to quickly understand how they would make their returns. There was a mismatch in terms of languages used.
Peter ended up not advancing to the next round. With graduation then six months away, his attention turned to finding future employment. He wanted to continue with his idea, but without a product and with no win to provide the funds to develop this website, he felt he had no path forward. Peter ended up achieving a great job doing what he cares about — helping the economic development of the City of Detroit. Yet, I often wonder if he had support that met him where he was in his journey, how many tens of thousands of small businesses could better be supported not simply in one city, but across the entire country.
Melissa on the other hand was an MBA student. She had access to informal peer networks and already knew many of the terms used in the competition. She could speak to the judges in a language they understood. What is more, she had a boyfriend who went through the MBA program and the Michigan Business Challenge before her. This gave her several advantages.
The most crucial of these was time. When a person finds out about an opportunity, it can dwell in their mind. Initially they might choose a simpler idea based on problems they face every day — this is often how you get a dozen different meal kit startups and laundry service startups that spring out of college campuses. But as more life happens, whether it is a family member’s decreasing mobility, a cousin’s addiction crisis, or the arrival of tax season. You begin to slowly build more complex solutions in your head, from new ways to build mobility assistance into subways, new approaches to tele-health and mental wellness, or apps to streamline the process of tax write-offs for contractors throughout the year.
With the additional year Melissa had to think about her idea she had more time to think of potential flaws in her strategy, to notice competitors, and to hone her value proposition by talking with potential customers. Melissa had seen places where her boyfriend had messed up and could better avert those same problems in her own company. She knew how important the supplementary classes were to getting the business plan and pitch right. Melissa’s pathway through the Michigan entrepreneurial ecosystem looked more like a second-time entrepreneur than a first-time entrepreneur. She had a better understanding than most of where to most effectively spend her time and energy. She had a better information map.
I want to stress that there was nothing unfair in Melissa’s advantage. Perhaps instead of a boyfriend, it was a student whose parent was an entrepreneur, or maybe a student who went to the university for undergrad and grad school and so had several chances to compete. There are many ways that people develop strong information maps about entrepreneurial opportunities in their ecosystems. But the divergent paths of these two entrepreneurs points to two different ideas that can help entrepreneurship programs build stronger programs for all of their founders: the idea of connected goalposts and pathway decay, which is at the center of why developing connected goalposts is so hard.
The University of Michigan is an interesting entrepreneurial ecosystem in the sense that while many schools struggle to develop one entrepreneurial program, the university has half a dozen. Hackathons run by the Computer Science department, Innovation in Action, the Business School, the School of Information, a student-led group called Optimize, TechArb, and Innovate Blue. All of these different programs have a slightly different take on what entrepreneurship means, they have separate competitions, different timelines, and often have fundamentally different ideas of what entrepreneurship is and how to best do it.
The first year Peter went through the Urban Planning program he was not aware of the Michigan Business Challenge until it was ongoing. His second year was his one shot, and when his company did not go through to the finals, he was unsure how to move forward with his idea.
One of the most valuable things a university can understand is that the connections between the resources they provide need to be as thought through as the resources themselves. This is hard to do because generally each program has one leader in charge, and this program leader has their own metrics for what makes their programs successful. So, they concentrate on one thing: getting more students through their individual program.
But how a university entrepreneurship ecosystem succeeds is by looking less at how many entrepreneurs go through each individual program than the total number of entrepreneurs that are coming out of the university as a whole with successful companies. This mirrors an important idea in factories of throughput. Let’s say you work at a factory that makes computers. One machine can make 500 keyboards, another makes 300 screens, and the final machine makes 100 motherboards every hour. Your total throughput for a computer as a whole is only 100 computers because of the constraint of how many motherboards can be created in an hour. In factories managers are taught to focus their energies on increasing the productivity of the constraining operation, or the operation that produces the least output. If a factory wanted to increase their total output, factory managers would need to focus on increasing the amount of motherboard machines operating.
Entrepreneurship programs should start by looking across the whole length of a student’s interaction with the school’s entrepreneurial ecosystem to find places where there are too many students that want access to a certain resource, whether it is a legal clinic, a venture mentor, or a spot in an incubator program. When you find a large discrepancy between entrepreneurs who need access to a resource versus how many entrepreneurs can be served, the most straightforward positive change you can make to your entrepreneurship program starts here. To be able to do this, you need to keep track of all of your resources, how many students want to gain access to a certain resources, and how many students can be served. The next section delves more into a framework for how you can go through this process of resource tracking. However, with limited funds and personnel these kinds of program-enlarging changes tend to be slow and expensive.
There is also the matter that the way a company is built is a far cry from a factory operation. Imagine instead of a regimented factory line with machines producing the same widgets every time, there’s a new person on the line for every run and the machines need to be create something different each time. Companies are so hard to make because the differences in teams and ideas makes for low replicability of the same steps to the same outcomes.
This is why while universities should understand what their low and high performing programs are, there is another element to consider: the connections between the programs.
Each jump between a different program is a place of ambiguity that adds friction. Ambiguity in when the program starts, where to apply, what should be in the application. Peter did not know what he should be focusing on during the competition which put him at a disadvantage. Likewise after the Michigan Business Challenge ended, Peter stopped his company because he did not know the steps he needed to take to continue on. The ambiguity Peter faced is tackled in Loran Nordgren and David Schonthal’s book, The Human Element, “Think about the first explorer to navigate new terrain, or a rat exploring a maze for the first time. If you don’t know the way, you have to discover the path for yourself. It means trial and error. It means false leads and dead ends (p.85)”. With each unproductive step toward a profitable company entrepreneurs lose valuable time and money and are more likely to shut down.
To increase the connectivity across the entire entrepreneurship community, I want to introduce the metric called Time-to-Resource (TOR). TOR measures the time between when an entrepreneur stops one program that the university offers and starts the next. A low TOR value means that students are efficiently navigating through the university ecosystem.
Since the start of this research, the University of Michigan has made great strides to centralize their entrepreneurial resources to help students understand what programs are available to them. However, there are still many universities that have not helped students “connect the goalposts” by centralizing resources and timelines for students’ routes through the entrepreneurship program.
Why there was no central location of all the entrepreneurial resources can be blamed on budget, but in discussions with program leaders at other universities, there was a far more mundane reason: program leaders were not thinking of how large a problem the navigation between programs is for students. This brings us to our second theory that shows why it is often so hard for program leaders to develop these maps for students: pathway decay.
Ask someone to name the nation’s capital and they could probably do so. But, if you ask them where they first learned this fact, most people will be stumped. People can be very good at remembering names, dates, and places, but unless there is an overwhelmingly unique way in which they came to learn a certain fact, the knowledge of how people came by information is quickly lost.
Forgetting is an integral process of the human brain to make room for new memories. Remnants of memories are retained in our large chasm of implicit memory, or non-declarative memory. This type of memory people are unaware that remembering has occurred, but are able to still act even unconsciously knowing this information. The painter that holds their brush at a certain angle to create a certain brush stroke without remembering why, the dancer that positions their feet to leap in a certain way without recalling that they did so. Often, once a memory pathway is relegated to implicit knowledge, it becomes harder to teach why you did such an action unless you actively tried to maintain those memory pathways.
During my interviews at the University of Michigan, I was surprised by how program leaders saw students stopping work on their startups after a competition as lack of interest instead of lack of understanding in pathways forward. There seemed to be the commonly accepted notion that many students entered competition in the hopes of winning the prize money, and when that was not accomplished, they left entrepreneurship. Instead, what I found was that there were many students who wanted to explore career pathways that did not exist or genuinely wanted to develop companies that solved problems they encountered in their research. Since competitions were usually the most publicized aspect of entrepreneurship for entrepreneurship around the school, it brought in a lot of students that were unprepared to enter and did not know where to go after.
As experts within the system, the activities of entrepreneurship become intuitive and where to find resources natural. A lot of next steps that seemed obvious to program leaders were “shrouded in ambiguity for everyone else” (p.85, The Human Element). Even as program leaders often told students to do customer inquiry there were definitely gaps in their own understanding of student motivations and information maps outside of how it concerns their individual program or initiative.
If you are a program leader that sees large amounts of students who join your initiative then drop out of the entrepreneurship funnel entirely, you need to embrace the fact that your information maps are not the same as the students you work with. Creating a vibrant and equitable entrepreneurship program will take every bit as much user inquiry as the students themselves must do.
The diverging stories of Melissa and Peter highlighted the idea of Connected Goalposts as to why some students who seemingly start in the same place have drastically different ending points. In the next sections we will turn to strategies you can use to improve your own entrepreneurship ecosystem.
First is the idea of No Last Steps. For every program or competition, it demands embracing the idea that winning or not winning a competition does not define the potential success of a startup. For the time students invest in the competition, program leaders need to give back specific knowledge of how students, win or lose, can move forward with their ideas.
The second step is the build out of Connected Maps across entrepreneurship programs. The build out of connected maps begins internally with the creation of a Resources Timeline of what resources for entrepreneurship are available to students and when throughout the year. Next, a survey of what resources students know about to understand what their information maps are. Chances are, they will not directly align with the resources available. To merge the gap between existing resources and knowledge of those resources, you will have access to guides to help you build out a visual Resource Map that helps students efficiently travel through the university entrepreneurship ecosystem.