Nothing like competition and cash prizes to get businesses people fired up. In rural Vermont, contests for the best new business applications on the web -- plus training and mentoring -- are improving scores of local companies.
As communities put final touches on their 2012 economic development plans, they should consider incorporating an approach that’s increasingly popular in the broadband world: contests offering cash prizes for creating effective broadband apps. These competitions are happening in metropolitan areas, but there’s no reason rural communities can’t get aboard the trend, too.
Chattanooga recently announced a contest offering $100,000 to the person or group that comes up with the most creative application to run on their gigabit network. Infrastructure vendor Alcatel-Lucent put up the money as the contest’s sponsor.
Communities reap broadband’s benefits from the applications that run on the network as well as from a high-speed network itself. But how do you entice people to create applications if they can’t afford to develop a new product? Offer a healthy incentive, of course.
Apparently this is catching on. Chattanooga soon added additional contests and incentives to its initial offer that now promises up to $250,000 in prize money. (Listen to Gigabit Nation interview for the details.) The two Kansas Cities responded with a contest of their own, the “Gigabit Challenge,” that offers a similar amount.
These contests may seem like extremely expensive and time-consuming activities for increasing broadband adoption. However, they can both be affordable and generate a payback soon if they’re executed properly.
Local businesses, come on down!
The Northeast Kingdom (NEK) of Vermont consists of the three most northeastern counties in the state (Caledonia, Essex and Orleans). Fifty towns dot this region with an average of 1,800 residents per town. These are three of the state’s poorest counties with chronic unemployment that is higher than the state average.
Some parts of the Kingdom get 10 – 14 Mbps broadband speed, but there is no coverage in many areas. A few remaining areas receive 256K on a wireless network with weak backhaul capability, and others have satellite Internet access that doesn’t work in the winter.
Laura and Al Duey are a couple who took an active interest in getting NEK residents better broadband, but discovered another problem. “My husband and I had been doing broadband projects for the Vermont Council on Rural Development (VCRD) for several years,” Laura states. “Mostly we encouraged and supported local rural broadband committees’ efforts to bring broadband to their communities. We were fairly successful, but the service providers reported that in spite of the committees’ enthusiasm, broadband take rates were unprofitably low.”
VCRD started a program called the e-NEK Project to concentrate efforts in three towns to connect businesses to the Web, and to create a test bed of activities, processes and applications that deliver broadband benefits to those businesses. VCRD would then define best practices that other communities throughout the region could use.
In 2010 the Dueys developed a plan to run a contest for small business owners, but region-wide, in which entrepreneurs would create plans for using the Internet effectively. The contest was successful because the owners took full responsibility for developing their plans, contestants received significant training and mentoring, and most of the plans were implemented within an e-NEK-specified timeframe.
The Dueys modified an economic development tactic used by a regional development agency in the NEK, which was a contest for entrepreneurs to create formal business plans for existing or planned ventures. The entrepreneurs competed for cash prizes. Laura says, “Around 35-50 businesses participated. Not only did they launch businesses based on their plans, but participating also helped some realize before laying out money that their ventures likely would not be profitable.”
A steering committee was comprised of the Dueys and representatives from local businesses, the regional economic development agency, the Small Business Administration and the Vermont Small Business Development Center. The committee set up a mentoring program for contestants that strongly influenced the ultimate goal of increasing broadband adoption.
The program included Webinars presented by Web-development professionals who trained business owners in specific skills and helped contestants shape their plans. The committee also set up online forums (message boards) to address various technical and business operations topics, and recruited professionals with the appropriate skill sets to respond to contestants’ questions.
The e-NEK Project awarded $15,000 in Web-related services for plans determined to be the best, and the prizes had to be used to help implement these plans. Eight local businesses and Internet-service providers were contest sponsors, providing $7,000 in cash prizes. The committee recruited a panel of judges to read, rank and award the prizes.
Thanks to these efforts, 110 small businesses from the NEK participated in the contest, either registering for it, attending the educational Webinars, or both. Representatives from the companies attended one or more Webinars, which they could do without having to enter the contest. Within the region, 51 businesses submitted preliminary plans, and 43 of these plans were refined into final submissions.
“It’s tough to analyze the economic development impact of the contest since the plans submitted to the contest were executed during time the economy was tanking,” comments Duey. “Anecdotally, Amy Bona, who won services for her plan to update her Shear Sensations Web site to add a section on weddings, mentioned that her bridal party business was up significantly this year. Crystal Conley, from Green Mountain Fence, reports that the addition of a fence calculator to the site funded by their contest prize has saved a lot of employee time formerly spent on pricing fences.”
There are several important lessons that communities can learn from a contest such as this. First and foremost, the contest does not have to have a high price-tag to be successful. However, it does require a significant commitment of time from several people. Second, the mechanics of how the contest was conducted (forums, Webinars, judging) was valuable in helping all contestants improve their Web sites, even if they didn’t win any prizes. Third, heavy local promotion of the contest and encouragement for those who win service prizes to spend locally can keep money flowing inside rural communities.
Ultimately, the contest is a winner because it got many businesses using and expanding their use of the Internet to make money, to save money and to run their companies better.