Very well said! As a writer in the trenches, this really hits home!
I love writing contests, pitch contests, twitter contests, the like. I loved participating when I was looking for an agent and I love watching them now that I have an agent.
I love them because they bring writers together to cheer each other on. You can find critique partners (waves at Lex Martin, Amy Pine and Megan Erickson — hello Writeoncon 2013!), you discover amazing other authors who become your friends on Twitter and might beta read for you, you refine your pitching skills, and sometimes, you can find an agent.
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