In two weeks, students will gather in Kresge Auditorium for MIT’s 26th Annual $100,000 Entrepreneurship Competition. The event has served as a springboard for several iconic companies over the years. But the full impact of the $100,000 competition was much broader.
For more than 20 years, the $100,000 format – which includes mentorship, funding and support services for teams prior to the final pitch competition – has also been replicated around the world.
Started by MIT students and alumni with $100,000 connections, these competitions have cumulatively helped entrepreneurs start thousands of businesses that have gone on to raise billions of dollars. They have also helped build innovation ecosystems that have transformed local economies.
Initiatives led by students and alumni have been supported by local governments, other universities, and private organizations. MIT has also supported replication of the $100,000 competition through programs such as the Global Startup Workshop (GSW) and the Regional Entrepreneurship Accelerator Program (REAP).
In some cases, the initiatives came to life after members of the MIT community launched them. Others have closed over time, although organizers say they have led to positive changes in perceptions of entrepreneurship. All were motivated by a desire to bring MIT’s unique entrepreneurial spirit to other regions.
“Business competitions like the $100,000 competition can be very powerful, especially in areas that don’t have a lot of startup culture, where you really want to galvanize young people to participate in entrepreneurship,” says Fiona Murray, Associate Dean of Innovation and Inclusion. and the William Porter Professor of Entrepreneurship at MIT Sloan. “Seeing a group of young people from diverse backgrounds on stage presenting new ideas makes people say, ‘Someone like me could go do that.'”
A student-led story
MIT students were also the driving force behind the initial $100,000 competition. Students from MIT’s Entrepreneurship Club originally devised the business plan competition in 1989, setting a goal of a $1,000 grand prize before winning enough support to expand it to $10,000 the first time. year.
The competition was an immediate success, and within a few years participants began to wonder if the model could stimulate entrepreneurial activity outside of the MIT campus.
In the mid-1990s, the student organizers of what was then the $50,000 competition started the Global Startup Workshop to help people from other regions who were interested in starting similar competitions. Today, GSW is an independent, student-led conference and has hosted workshops focused on building entrepreneurial ecosystems on six continents with attendees from over 70 countries.
Around the time the GSW began, Juan Martinez-Barea MBA ’98 was working on the organizing team for the $50,000 competition.
“Through this experience, I found my purpose in life,” says Martinez-Barea. “I came to MIT as an engineer, but discovered a love for entrepreneurship.”
Martinez-Barea decided to bring the model to her hometown of Seville in Andalusia, Spain. He worked with Ken Morse, the former director of the Martin Trust Center for Entrepreneurship, and partnered with Sally Shepard MBA ’98 to launch the competition. Martinez-Barea was amazed at the reception he received when pitching the idea to students, investors, universities and businesses.
Murray says the collaboration between different stakeholders is one of the biggest benefits of the program.
“It’s a beacon,” she says of the $100,000. “It attracts motivated people, gives them a timeline, helps them build a network and teams, provides mentorship, etc. It has all the elements you would need to build a truly effective innovation ecosystem.”
In its first edition, in 1999, the Andalusia competition attracted 300 entrepreneurs with business ideas in fields ranging from microelectronics to biotechnology, including artificial intelligence and robotics. It also received great media attention – Martinez-Barea says Spain’s most important newspaper published a photo of the contest on its front page with the headline “Spanish Silicon Valley”. More than 100 startups were launched from the competition over the following years.
Around this time, another group of $100,000 organizers at MIT, including Victor Mallet ’02, launched the Ghana New Ventures competition. They received funding from MIT to organize the first competition on MIT’s independent business period in 2001. The event taught university students how to pursue business ideas and connected them with mentors.
“Working on the competition at MIT was the most inspiring thing I’ve done as an undergrad,” Mallet says. “I wanted to see if it would also work in Ghana and inspire people there, and I think it does. [Entrepreneurial thinking] was a whole new thing in Ghana. People were really excited about it.
Miguel Palacios MBA’99 entered the $50,000 contest (which would increase to $100,000 a year later) as a student at MIT. In 2003, after a few years in management consulting, he started working to establish an entrepreneurial ecosystem at the Technical University of Madrid. It was easy to decide what would be one of his first initiatives. The entrepreneurship competition he helped create, called actúaupm, is now in its 19th year and has helped create more than 300 businesses. Palacios says hundreds of teams participate and about 20 companies emerge each year.
“The key [to the competition] these are the phases,” he says. “The initial phase is very low risk and you can play around with your idea. With other models like incubators, people decide who comes in and who doesn’t. With the competition, you allow everyone to participate to the ecosystem, so you’re bringing a much more diverse pool of people with different ideas and abilities, and you’re also showing people that entrepreneurship can be a career option that can generate progress and wealth.
In 2004, Neil Ruiz PhD ’14 and other students launched the Philippine Entrepreneurship Startups Open (PESO). The group received support from MIT’s PKG Public Service Center to travel to the Philippines to establish local partnerships.
“My Filipino classmates and I were asking what we could do to incentivize them to stay in the country,” Ruiz recalls.
The team was able to get some of the Philippines’ most prominent business leaders to judge the first-year event, and the winners were able to ring the bell on the Philippine Stock Exchange the day after their victory.
“It was a way to help entrepreneurs set big goals,” says Ruiz. “There were some very good ideas right away. It was so inspiring.
These types of entrepreneurship competitions can have a big impact in places where entrepreneurship isn’t as common as in the United States, Mallet says.
“Other places may have cultural barriers to entrepreneurship, so it helps those places to have someone who has been exposed to MIT and the American way of doing things to take that approach to those communities,” Mallet says. .
Murray, who has helped set up $100,000-style competitions in regions around the world as part of MIT REAP, agrees that the $100,000 format can strengthen entrepreneurial thinking.
“One of the most powerful outcomes of $100,000 is to inspire culture change,” Murray says. “Even if only a small fraction of the things that are started actually move forward, it’s starting to show young people the art of the possible.”
Multiply MIT’s impact
In 2007, the Global Startup Workshop parted ways with $100,000 to become an independent organization run by MIT students. One of GSW’s organizers at the time, John Harthorne MBA ’07, who was also part of the $100,000 winning team that year, went on to found MassChallenge, a global startup accelerator that day, has helped nearly 3,000 companies raise $8.6 billion.
MassChallenge is one of many initiatives directly related to the $100,000 that still work today. In addition to Palacios’ competition, which was eventually taken over by his former university in Madrid, PESO was adopted by the Ayala Foundation to provide more stable funding.
The efforts show the crucial role of students in exporting MIT’s approach to entrepreneurship to the world. In the process, they multiplied MIT’s impact in ways that are hard to quantify.
Martinez-Barea, for example, is still being contacted by people interested in replicating his Andalusian competition more than 20 years later. He says many regional governments have replicated the format to boost entrepreneurship in their economies.
“It was a question of social responsibility in my case,” explains Martinez-Barea. “I was interested in creating wealth and prosperity in Spain, and it became an engine of economic development. I think the reason others have reproduced [the $100K model] is simple: Because it works.