Program would divert external funds from his favored
projects. But a faculty committee voted by a narrow margin to approve the
launch of this program. The competition’s inaugural in 1984 involved only UT
MBAs and was shepherded by Professor Kenneth E. Knight during this critical
phase. Dr. George Kozmetsky and the RGK Foundation played major roles in the
Program’s survival during these early years.
National, then International
In 1989, under the leadership of Professor Raymond W.
Smilor, the Moot Corp®Program held its first national competition. MBA teams
from Harvard, Wharton, Carnegie Mellon, Michigan and Purdue joined Texas in the
competition. MBAs and faculty advisors alike were enthusiastic about the Moot Corp® experience, and the following year Dr. Smilor invited three prestigious
business schools from outside the United States to participate. In 1990, the
London Business School, Lyon Graduate School of Business (France), and Bond
University (Australia) were represented, and approximately the same cast of
universities competed in 1991 and 1992. In the summer of 1992, Dr. Smilor
resigned from The University of Texas at Austin to become Director of the
Kauffman Foundation Center for Entrepreneurial Leadership.
Going Global and Increasing Impact
Having
been involved with the Moot Corp®Program since its inception, having once co-taught the Moot Corp® course with
Ken Knight, and having been an entrepreneur, Gary M. Cadenhead, Ph.D. was a
natural choice to succeed Ray Smilor.
Since becoming Director of the Moot Corp® Program in
September 1992, Dr. Cadenhead has transformed it into a global program;
deepened and broadened the participation from American business schools; and
formalized the sharing of ideas for improving entrepreneurship education among
the participating faculty.
The Competition in 1992, the last before Dr. Cadenhead
became Director, involved 11 universities: eight from the United States and one
each from Great Britain, France and Australia. To have a greater and more
significant impact on both entrepreneurship education and the reputation of UT
Austin’s entrepreneurship program, the number of participating universities had
to grow. The initial American strategy had been to invite only universities
with top-twenty MBA programs. This strategy had two shortcomings: it excluded
universities with outstanding entrepreneurship programs in lower-ranked
business schools; and it excluded MBAs from unranked schools who might have
outstanding new venture proposals.
The first of these deficiencies was overcome by
including top-ten entrepreneurship programs in the invitational set. And now,
by inviting winners of other new venture competitions to participate, the
second concern has been put to rest as well.
The number of MBA new venture competitions in the United
States has continued to grow. Not long after the establishment of the Moot Corp® Competition, the
University of Nebraska - Lincoln began its own contest in 1989, followed by San
Diego State University in 1990, the University of Georgia in 1991, the
University of Oregon in 1992, the University of Indiana in 1996, Rice
University in 2001, and Clark Atlanta University in 2001. The winner of each of
these contests is now invited to the Moot Corp® Competition.
Intra-business school competitions have also recently been introduced at such
prestigious institutions as the Kellog School, the University of Chicago and
the Harvard Business School, and MIT has a university-wide competition
instituted nearly ten years ago.
The strategy for global expansion initially entailed
inviting the top business schools from regions not already represented. This
resulted in participation from universities in Europe, Asia and Latin America.
The second strategy for global expansion involved
licensing the Moot Corp® name to
prestigious universities in Asia, Australia, Europe, Latin America and Africa;
and providing technical assistance so that they could hold regional Moot Corp® Competitions. The
Chinese University of Hong Kong held the first Asian Moot Corp® Competition,
directed by Professor Bee Ling Chua, in 1998. The best business schools in
Asia, representing China, Hong Kong, India, Korea, Singapore, Philippines,
Taiwan and Thailand, now compete every March.
The first Australian Moot Corp® Competition began
in 1999, and it now includes teams not only from Australia, but also other
Pacific Rim countries. In 2000, the Ivey Graduate School of Business at the
University of Western Ontario launched the first Canadian Moot Corp® Competition. The
first African Moot Corp® Competition was also held in 2000. The inaugural Latin
American Moot Corp® Competition was held in 2001 in Sao Paulo, Brazil, and
hosted by Fundacao Getulio Vargas. The European Moot Corp® Competition is
scheduled for 2002.
The expansion strategy has succeeded. Thirty
universities now send teams to Austin to compete in the Moot Corp® Competition and
many more are eager to participate. In addition, the international success of
Moot Corp® Competitions has contributed to the prestige of the
McCombs School of Business’s entrepreneurship program and to its ranking. A
recent entrepreneurship program ranking by Success specifically listed
the Moot Corp® Competition under its “Wow Factor” for the McCombs
School of Business.
No Longer Moot
In the early years, the Competition was truly moot: no
MBAs launched the venture that was the subject of their business plans. The
process was strictly an academic exercise. However, many of the participating
MBAs went on to work for or started their own entrepreneurial ventures and
became successful entrepreneurs; but they did not “ride the horse” they had
written about in their business plans.
But then, a funny thing happened on the way to expansion
and globalization. The process ceased to be “moot”: MBAs started converting
their classroom creations into real-life enterprises. Since 1993, the team
winning the annual competition for UT MBAs has moved into the Austin Technology
Incubator and launched its venture. Five are still in business, and they range
from low-tech to high-tech:
Ampersand Art Supply manufactures and markets a new
surface for artists called “Claybord™”. It is available in art supply
stores throughout the United States and Canada as well as in Australia,
Japan, Great Britain and France.
Partnerware Technologies develops and markets
software to increase the effectiveness of sales organizations.
Broadcloud.com has proven technology that enables
mobile laptop computers, PDAs, palm computers, digital cameras, and other
wireless devices to transmit image and graphics-rich Internet content over
wireless networks at 56K modem speeds.
Isochron Data has developed wireless technologies
that allow companies to monitor and gather data from their equipment in
the field on a real time basis. The initial application is for vending
machines.
Halsa Pharmaceuticals has discovered a material
that, when injected into obese patients by a physician, will generate a
rapid, safe and substantial loss of body fat.
As the reputations of the Moot Corp® Competition and
the entrepreneurship program at The University of Texas at Austin have spread,
increasing numbers of entrepreneurially minded students have entered the UT MBA
program. Coincident with this experience, one to four teams are launching
businesses each year. Similarly, MBAs from around the world participating in
the Moot Corp® Competition are increasingly likely to launch their ventures.
The best-known company to have won the Competition was
launched by graduates from the Wharton School in 1991; they publish The MBA
Career Guide, now the #1 MBA
publication in the world in circulation. However, Breeze Technology, the 1994
World Champion from Australia’s Bond University, may soon be the most
successful venture to have participated in the Competition. Now called
WeWalk.com, the company offers a walking shoe with a patented ventilation
technology resulting in cooler, dryer feet and utilizes a mass customization
manufacturing process.
Unexpected Funding, Then Planned Funding
Since 1997, the Moot Corp® Competition has
been held in conjunction with the Texas Venture Capital Conference, sponsored
by The Capital Network, a not-for-profit investor network created by the IC2
Institute of The University of Texas at Austin. At this Conference, some 25
entrepreneurs have ten minutes apiece to showcase their companies to the over
500 venture capitalists in the Four Seasons Hotel ballroom. Because the Texas
Venture Capital Conference is held the day before the Moot Corp® Competition
begins, Moot Corp® participants can observe entrepreneurs doing for real
what they themselves will simulate. The MBAs have an opportunity to interact
directly with investors at the Conference’s closing reception, where each Moot Corp® team has a table to display its production. Scheduling the Conference
and the Competition back-to-back facilitates some of the venture capitalists’
staying on as judges for the Moot Corp® Competition.
In 1999, for the first time, several teams received
funding from one or more of the judges. These investments were brokered outside
of the formal process of the Competition. With increasing numbers of MBAs
intending to launch their ventures and more of the judges emerging from the
venture capital community, it is increasingly likely that more teams will find
backing for their dreams as a result of having participated in the Competition.
The Moot Corp® Pontoon Fund was founded in 2001 to
provide early stage bridge loans of $100,000 to the Global Champions in order
to give the entrepreneurs financing while they are raising capital. The loans
are convertible into equity at the same price as negotiated with the initial
venture capital investment. In addition to the goal of facilitating the launch
of the winning venture, another goal is to endow the Moot Corp® Program through
capital gains from the Fund.
The Spiral Factor
In the final round of the Moot Corp® Competitions, both
the finalists' presentations and their question and answer sessions with the
judges are videotaped. The winning team’s video and business plan, along with
appropriate instructional materials, are packaged into a “new venture module”
which becomes a teaching case for the following year’s competitors. In effect, this top-notch business plan becomes the benchmark for the
following year: expertise accrues and the achievement level is constantly
rising. This unique spiral factor has worldwide impact, as all participating
schools have access to the modules and strong motivation to incorporate their
lessons into subsequent entrepreneurship courses.
The Moot Corp®Program: Exploring
the Frontier
Entrepreneurs around the world are exploring new
economic frontiers and creating the future. They are riding innovation into the
21st century, creating wealth and jobs in the process, while meeting the
ever-changing and expanding needs of consumers. Entrepreneurship represents a
paradigm shift in business activity as we enter the new millennium.
This shift is having a profound impact on the corporate
world as corporations downsize, reorganize and reengineer to become more
entrepreneurial. Our best-managed corporations are using the entrepreneurial
model to enter new markets, invigorate their organizations, commercialize
emerging technologies and continue to grow. These corporations have recognized
that the choice is to grow and adapt to the changing environment, or to
stagnate and wither. One cannot recognize the choice without clearly acknowledging
the only viable option.
Business schools face a similar choice. Business
education based on functional approaches and taught by specialists increasingly
insulated from market forces and real business problems did not serve us well
in the eighties. Clearly this approach is even more inappropriate for the new
era. Our best MBA programs infuse entrepreneurship throughout their core
curricula and recognize that entrepreneurship should become a major focus of
business education.
Riding the crest of this wave into the future, MBA
students recognize the value added to their education by this new focus.
Students have been electing entrepreneurship courses in overwhelming numbers. A
major question facing business schools today is how best to shift entrepreneurship
from a peripheral activity into the center and infuse entrepreneurial thinking
into the core of MBA education. Business plan competitions, stimulated by
strong student demand, are one response to this challenge. But why has the
popularity of business plan competitions continued to grow?
Business school educators and education as a whole have
become increasingly specialized. Even the traditional integrative course,
business policy or strategy, has become a functional one. Entrepreneurship
courses in general and business plan courses in particular now demonstrate the
quintessential process for integrating the MBA experience. Here MBAs have the
opportunity to apply knowledge assimilated and methodologies drilled in other
business courses and they are pressed to cobble together a successful new
venture. The case method clearly surpasses lecturing as a technique for
imparting entrepreneurial skills to MBAs. Writing business plans provides
another, parallel process and offers analytical depth. At last, we have a
teaching and learning methodology that facilitates MBAs’ focus, study and
effort, integrating functional knowledge and performing in-depth analyses, to
give wings to their entrepreneurial dreams.
The Moot Corp® process is a dynamic one that
enables the sharing of new venture proposals among entrepreneurs. This approach
is instrumental in the continuous improvement of entrepreneurship education.
Although still a young institution, the Moot Corp® Program is on a
global trajectory to entrepreneurial excellence.
