Craig from trackster.com asked me last week in a comment he added to my Willamette Angel Conference post:

I was wondering with all these business plan competitions that you judge, how many winners or even non winners have you seen turn into successful companies? Are there any examples that you could give?

Yes, a lot of these companies make it. It’s more like half than the one in 10 portion you’d think from the classic assumptions.

I’ve seen lots of these companies launch and become successful, in a much higher proportion than the classic assumption of one or two of every 10.

For example, take a look at this page from the Rice Business Alliance, which has run one of the best of these contests since 2002. The graph here shows the success rate for all of the 166 ventures entered in the Rice contest from the beginning. The trend is very clear. The Rice Alliance says that since 2001 (quoting their website):

• 66 of our past Rice Business Plan Competition teams are successful business start-ups
• 192 business teams from national and international schools have participated
• More than $90 million in capital raised by Rice Business Plan Competition participant companies

Although they make the raw data quite as accessible as the Rice Alliance does, the University of Texas’ Moot Corp, the oldest and most respected of these contests, has to have a similar success rate. I say that because I’m involved with both and the plans and the people are excellent in both. And Moot Corp does post a very long page full of specific successes, with a lot of details. I saw all of the companies they have there from the 2007 and 2008 contests, and I’m not at all surprised that they’ve made it.

I particularly liked cQue, which recently landed a contract with the San Francisco Giants to revolutionize ticketing technology; and Evapt, an automated billing system for software as a service; and several dozen others. They are up and running, they are raising money, they are making it.

To be fair, these two competitions tend to be the best of the best. The entrants are carefully selected. Most of them have won local or regional contests. They are grad students and people in the real world. I’m also involved in some less ambitious business plan contests, like ones for undergrads, that don’t produce a lot of real companies.

And this year I’ve added angel investment, which is a different thing entirely. Like the major academic contests, it is about business plans, ventures, presentations, questions and answers, investors’ points of view, exit strategies, and so on. Unlike the academic contests, there are no MBA requirements, and no faculty advisors.

And specifically, the angel group I’m in, the one I posted on last Thursday morning: there were five finalists that presented to the group. All five of them are very real companies already, even thought they want and in some cases need angel investment of $125K. All five will be there a year from now. The one with the lowest need and least ambitious forecast, a software company called CenterSpace, won the investment. But the four others that didn’t win, led by my personal favorite, Zapproved, have good future prospects. That was also Zaps Technologies, Wicked Quick, and Floragenex. All of these are going to survive and grow.

Imagine, if you will, this scene:

You are in a group of angel investors talking with entrepreneurs looking for funding. Or you are in a group of venture competition judges giving feedback to teams after the judging is over. The entrepreneurs listen intently, nod, they’re understanding, and then suddenly one or more of their faces change, crestfallen, disappointed, cheated. Something that was just said triggered an immediate reaction:

But we put that in, they say, because so-and-so (the last angel group they talked to, or the judges of the last contest they entered) recommended it.  We specifically changed our plan to accommodate feedback. And now your feedback is in exactly the opposite direction.

I see it a lot. I’ve seen it for years in the judging of the venture competitions. Lately I’ve seen it in reviewing potential angel investments.

For example, one that comes up a lot is whether you go for the broad sweeping expansive view of future market potential, which some groups like and other groups tag as lack of focus or realism.

I like focus myself. Keep it manageable. Narrow targets. Getting to $5, $10, $20 million in three or five years, but more in control. More realistic.

A lot of other judges want to see a bigger pot of gold at the far end of a more distant rainbow. “How do you get to hundreds of millions?”

So they go for big, because the judges say so. Then the next time, it’s “but you have too many targets; you’re doing too much.” And then there’s that look again, the disappointment. We’re supposed to do what the last judges suggested.

What if you had to take the classic business plan, developed for an MBA-level venture competition, and shrink it down to 10 pages?

Last Friday I spent a fun and fascinating day as a semi-finals judge at the University of Oregon New Venture Competition. My part of the program was evaluating four ventures developed by MBA students from Clemson, Northwestern, Penn State, and Michigan, along with three other judges. That was one of five flights, so there were 20 teams, selected from more than 100 entrants.

The new rules for this year gave them 10 pages for the business plan, plus up to 10 pages for appendices. The judges loved it, of course, because we have to read all the plans. The teams had mixed feelings.

Summarize. In this context, the venture competition, with teams of smart MBA students, it should have been duck soup (although that particular expression isn’t that popular at the University of Oregon, because the home team is the Ducks).

Keep the highlights. Stick to the headlines. Summarize. I don’t care if you’re the next big thing, with an unimaginably exciting new idea and a great team, you can still create a meaningful summary in 10 pages.

Start with a one-page summary. Then tell a story about the need, and your solution, your market, your secret sauce, your strategy, and your great team. Add in a financial summary, and don’t forget to highlight your capital needs, valuation, and exit strategy. If you do no more than 3 paragraphs in any one of these 10 main topics, you ought to be able fit that in 10 pages using a lot of bullet points and white space. Make it an attractive document that the judges, who tend to have older eyes, can read. Leave some space for some snappy graphics, a bar chart or two, and then include the financials in more detail in the appendices.

Some of the teams struggled too much with the page limitation. Some chose the dark-side option, filling the page with dense, small text. Some skipped important topics.

As we get used to these competitions, with page limitations growing more common, I’m expecting more teams to realize that there ought to be a master plan, from which these summary plans, and the presentations, and the elevator speeches, are just alternative output.

Once they get that, they should then start thinking more about the combined communication impact of the plan, the presentation, and the other elements. Can they summarize strategy briefly in a plan, and then explain it more in a presentation? I think so.  The plan and the presentation obviously overlap, but they both don’t have to cover exactly the same territory.

So today my business plan judging marathon month continues. After the event in Portland over the weekend, this evening I’m going to a three-hour meeting of the Willamette Angel Conference, reviewing business plans, listening to presentations, doing due diligence on plans.  On Thursday I leave for Houston, to judge the Rice University Business Plan Competition.

Business plans everywhere. I’m reading, annotating, filling in score sheets, and getting cranky. I explained that on this blog last Monday.

So what’s with the unrealistically high profitability projections? This year it seems like I’ve discovered a new 50-50 rule of profitability in business plans, as in, 50% of the plans I’m looking at project 50% or higher profits on sales.

That reminds me of a song my youngest daughter used to play: “That Don’t Impress Me Much.”

Occasionally a very successful startup will come up with something so new that it can, for a while, chalk up very high profit margins. That’s extremely rare. Out here in the real world, though, nobody really makes much more than 5-8-10% or so profits on sales. The real startups might make 15% or even 20%.

Projecting 40%, 50%, and even 60% profitability on sales doesn’t tell me you have a great business; it tells me you haven’t done all of your homework. You’re underestimating cost of sales, expenses, or both.

I find this particularly galling in business plans with some social implications, related to health care, or education.

What would I like to see instead? First, find out average profitability for the industry you’re in. Put that number into your plan. Then explain why your company’s projected profitability is higher. Proprietary technology, specialty niche market, new processes? Okay, I can take that; just be aware of what the normal is, so you know what you’re up against. Please.

Standard financials are available from several vendors, for less than $100 per industry (and here I can’t resist adding that they’re bundled with Business Plan Pro, my company’s software product. Sorry. I’m an entrepreneur. I can’t help it.) You can also get those from Oxxford Information Technology, or the Risk Management Association (RMA).

Anyhow, that’s my opinion.

What does personal branding mean to you?

To me it used to be about well-known experts whose names became brands in an almost-traditional business sense: Guy Kawasaki, Seth Godin, Tom Peters; they were experts whose names sold books and speaking engagements. Lately my view of personal branding has expanded as I start following John Jantsch, Anita Campbell, and Pam Slim, for example; bloggers, tweeters, authors, and experts.

I like to think that my favorite experts, my favorite personal brands, are authentic. Guy Kawasaki really is an investor, really was an Apple evangelist, and believes every word he says. Seth Godin has built his remarkable name around remarkable marketing. John Jantsch lives for Duct Tape Marketing, and Anita Campbell for Small Business Trends. These are real people.

And, whether you like it or not, you too are a personal brand. Much as I dislike the phrase personal branding it’s not just for big names any more. It’s for just about everybody who has enough online access to be reading this post.

Whether you like it or not. Which brings me to Me 2.0, Dan Schawbel’s new book — due out today — on personal branding. 

Reading Dan Schawbel on personal branding is something like a mirror image of a mirror. He has a great personal brand. He’s always on Twitter, often on major business blogs (not to mention his own) and is frequently quoted in business magazines. And he’s only 24 years old.

Like his book, and his quick career success, Dan is completely immersed in the realities that have grown up in just the last few years: Facebook, MySpace, Twitter, LinkedIn, and so on.

It may be that being young wasn’t even an obstacle, in his case, because that whole world began on college campuses (mostly) and then spread to the old folks like me. So of course he’s only 24. How could he not be?

And he’s got some very good advice to share. Beginning with his main point, the “like it or not” truth about it. Personal branding is no longer an elite concept reserved for a few big-name authors, columnists, or experts. The new world of the 21st century, with social media and Web 2.0 and Google and friends, makes it a fact of life for just about everybody.  He tends to focus a lot on the Gen Y college student looking for a job and starting a career,  but he would, wouldn’t he. There’s a lot of specific, detailed, real-world advice here about how to get your first job and manage your career, in the context of social media, blogs, Facebook, Twitter, and friends.  And a lot of what he says applies just as well to an old guy enjoying his journey into social media. I had to chuckle: what is “Me 2.0″ to Dan is something like “Me 11.0″ to me. I’ve been around longer.

I still hate the phrase. Personal branding sounds to me like white suits and pink ties and gold chains. I wish we’d called it personal footprint, or something like that. Maybe just engrave the phrase “this goes on your permanent record” on every keyboard.

When I started in journalism close to 40 years ago, one of the better teachers suggested that we also keep an ego file, always, of things we’d written. Today it’s almost reverse — Google and friends keep the file of things you’ve written, whether you like it or not. And Dan points out that you should think about it ahead of time, and make sure you like it.

He tells some good stories: Facebook stupidity, for example — the guy who was convicted for a crime from evidence he posted on Facebook, and the almost-urban-myth of the woman who skipped work because she was “sick” but posted her free-day fling on Facebook.

Much more important than that, however, is a well structured review of how the new world almost requires an awareness of personal branding. Unless you’re outside that new world you can’t escape it, and you can, with some good thinking and organization, manage it. Visibility is there.

Some key points that apply to me and my baby-boomer friends as we enter into social media:

• Authenticity: You can’t fake it for very long. You have to actually be yourself, or the effort to be that other person is overwhelming.
• You have to live with who you’ve made yourself to be in things that show up in Google and friends.
• Better to think about it and organize it — like a standard profile, picture, and personal statement — than to let it be random.

It’s amazing to me that Dan is only 24 years old. But maybe that’s the point. He’s onto something.