In the booming B-school business plan competition circuit, aspiring entrepreneurs from top schools go head-to-head for real funding. This week, Fortune is in Houston at the Rice Business Plan Competition, the largest and richest of its kind in the world. Also at Rice this year is Gautam Gandhi, Google’s (goog) head of new business development in India. Gandhi, who is serving as a competition judge at Rice, has been through the ringer at this competition, taking home the contest's top prize in 2004. His winning company, ClearCount Medical Solutions, tracks the use of surgical instruments in the operating room. It’s still in business today.
As a two-time startup founder with a finger on the pulse of the venture scene in the U.S. and abroad, Gandhi spoke to Fortune about the startup climate, his takeaway from the Rice competition, and how to make sure your pitch wows the judges -- or investors.
Fortune: What do you think about the startup landscape in the U.S. right now, and how does that compare to what you’re seeing in India?
Gautam Gandhi: I think that, as Americans, we’re really spoiled. We don’t realize how lucky we are. We complain about bias, discrimination, etc. But you go into these other countries? I’ll show you what discrimination looks like. I'll show you what freedom of speech means [when you don't have it].
In this country, it’s unbelievable. It’s so much easier to start a company here than anywhere else. Anyone could start a company here if they wanted to. Your biggest obstacle is yourself. It’s getting the confidence and getting the courage to do it. And that’s what’s great about these business plan competitions. To be honest, I don’t think we would have started our own company if we didn’t win the competition. It gave us, I’m call going to call it a false sense of confidence. It didn’t really mean anything, but when it won it, we thought, ‘Oh, we’re the best. We can do this.’
How did the business plan you presented at Rice hold up in the marketplace? Did everything go according to plan?
No, it did not go according to plan, but the product was pretty close. We built this medical device that tracks surgical sponges and instruments. We changed the actual technology of it, but not fundamentally. Everything else about the business plan competition -- when you’re going to get your first million dollars of revenue, how many millions you’ll have -- is always completely wrong. It’s always wrong. It’s like if I asked you, ‘Hey, why don’t you write out your life plan for the next 10 years?’ Things change along the way.
But the difference between a good entrepreneur and a bad entrepreneur is that, first, a good entrepreneur never gives up. Second, he changes very, very quickly when he realizes that something is going wrong. A bad entrepreneur says, ‘No, no. This is gonna work. This is gonna work. This is gonna work.’ He doesn’t realize that it’s not working. The right response is to say, ‘It’s not working. That’s ok, but let’s fix it.’ I don’t think anything in life goes according to plan.
What do you know now that you wish you’d known when you were a Rice competitor?
That’s a trick question. The real answer -- the true answer -- is that if I knew what I know now, I would never have started a company. That naiveté is actually your biggest asset. It’s actually what you don’t know that gives you that false sense of courage that you’re indestructible and invincible.
You say, ‘I won’t spend THAT many late nights working on this company.’?
Or, ‘We’ll just call our first customer and he’s gonna buy from us.’ Later, you realize it’s really hard. And that’s why I think that when you get older, you’re less and less likely to be an entrepreneur because you just know how hard it’s going to be. I would say, if anything, I wish I’d started earlier. Because you have less to lose. People say, ‘Oh you don’t have experience.’ But what you actually don’t have is a house and a car payment.
Do you have any advice for the competitors?
Relax and have fun. If you’re really, really tense and not having fun, in the room we can feel it. We feel the tension, and we’re just bracing ourselves. Tell a story. We see so many business plans here, but as human beings we remember stories. If someone tells you the story of how they started and what the problem is they’re trying to solve, that always resonates.
What about advice for when they’re really starting the business?
Make sure you have a really good team. If I had to say something to an entrepreneur, it would be that your idea is not actually as important as your team. You shouldn’t be the smartest guy in the room, and you should be comfortable with that. The team is really the most important thing.
When you went through the competition, was the feedback you got from the judges helpful?
Helpful for winning the competition or running the business? It’s two different things. It was definitely helpful for winning the competition. That pitch that I perfected every day, I actually ended up using the same pitch when I got real investors.
Basically, what you learn is how to tell a good story in 15 minutes. I was coaching a team earlier today and I told them, ‘What you’re doing right now is you’re showing a trailer to a film and you want the guy to come to the film. If this is your trailer, is he interested in watching the film or not? That’s it. You have 15 minutes.’
If you can’t tell a convincing story, you’re done. You don’t get the second date. It’s like speed dating, and you want to get to the real date. For that, it helped.
Editor's note: A previous version of this story misspelled Gautam Gandhi's first name. This has been corrected.