Teams That Triumph

Who’s most likely to win business pitch competitions?
Teams That Triumph

DEVELOPING SUCCESSFUL NEW ideas has long been considered an activity that relies on epiphanies and instinct, but in recent years entrepreneurs have refined their inventions by relying on scientific methods imported from the hard sciences. These methods include Rita McGrath’s discovery-driven planning, Eric Ries’ lean startup process, and David Kelley’s design thinking protocols. But do these approaches work for new social ventures?

The Hult International Business School has more than an academic interest in this question. Every year, our students participate in the Hult Prize, an international business pitch competition in which teams tackle global challenges. For example, in 2017, participants devised private-market solutions that would bring 10 million refugees into the formal economy. Hosted by a sister organization to the school, the Hult Prize awards US$1 million to the winning team.

To discover the processes that top teams use to develop their pitches, researchers at Hult asked 353 business students how they created and refined their ideas. We found that the students who created and tested hypotheses performed significantly better than teams that relied on their own internal logic and experiences. Students who won their regional competitions tested twice as many hypotheses as those who did not win. Those who won the entire competition confirmed three times as many.

Moreover, we found a positive correlation between students’ perceptions of self-efficacy—their confidence in their abilities—and the number of hypotheses they confirmed. We concluded that students who perform well rely on the scientific method, which in turn requires a degree of self-confidence.

An even more powerful predictor of student success was the number of rejected hypotheses. Students who won in their regional competitions rejected hypotheses at a rate four times greater than those who did not win. Yes, that’s right: Students who discovered that their first ideas did not capture customer demand were more successful in the long run.

That’s why we will encourage our students not only to cultivate self-confidence, but to test and reject more hypotheses before settling on a final idea. By relying on a combination of swagger and science, they will create solutions with global implications.

Ted Ladd is dean of research at Hult International Business School. He is based in San Francisco, California. This data was originally presented as “Science and Swagger to Overcome Uncertainty” at the U.S. Association of Small Business and Entrepreneurship conference in January 2018. The author also is revising it into a book chapter.