Following the series of 5 Investment Properties In which an investor angel is primarily looking for a decision on whether to invest or not, we will address the third characteristic of the product. How differentiated is it and how high is its degree of innovation? In the video Mario García; As a founding partner of Angel Hub, they share their experiences from an entrepreneur’s point of view with their product in raising capital with a special guest.
On this occasion, Federico Crespo, co-founder and CEO of the startup Valiot, is the special guest of the corporate and investment ecosystem. An artificial intelligence based platform that focuses on the optimization of production processes and value chains of manufacturing processes. Startup that has already received angel capital in Mexico and the United States.
Federico Crespo comments on his fundraising experience in terms of how deeply investors asked about your product, what they asked you, and how they liked or drew attention to your product in order to make the final decision to invest in it. He emphasizes that the first thing they want to understand is the business model behind the product. And once it’s over, they have analyzed the elements of the team and the market that were discussed in the previous columns and they see the potential of the product.
- To Know More: VIDEO: How To Calculate The Size Of Your Market?
Investors go deep into the ability you as a team have to develop the product and once it is developed they pay more attention to where it is and how it can scale and capture the greatest amount of market. The most frequently asked questions are: How innovative and differentiated is it from what is out there? Who is your competition and how does the product create value? Because what they are looking for is minimizing themigrate (Cancellation or abandonment rate), greater flexibility and speed; as well as scaling the degree of productivity. Since the angel investor, it’s all about climbing.
Mario García emphasizes the importance of productization, especially in B2B business models (From shop to shop). By “producing” we mean having a product ready that your customers can consume and scale, which is what angel investors and funds seek.
In Valiot’s case, the product is already mature enough that they can form alliances with integration and consulting firms that are already third parties so that they can not only sell their product but also implement it. In this way, commercial and operational capabilities can be scaled at zero cost.
- To Learn More: What Is An Angel Investor And How Can I Get Invested?
Another relevant aspect that needs to be assessed is technology. Technology is a trailblazer, but it’s not the same thing to have a digital platform that can be integrated with a company’s various management systems to get a more cohesive product that becomes more expensive for the startup. To be able to implement it to the company.
If you are an angel investor this is also important to write down ChecklistOf characteristics that have to be evaluated in a startup for a product problem:
- How innovative is it?
- How open is the team to growth / change?
- How flexibly can the product adapt to the market?
- How reproducible is your product?
- What is your balance between technology and reproducibility?
- What is your technology scale compared to your value creation?
An important tip for startups is to start with value creation first, and then with technology. Since this makes your product easier to sell, it becomes more difficult to explain and sell if you start selling without already having a value proposition. It always depends what your product is, its complexity will take on a different level of relevance. For example with digital platforms that compete in a market “the winner takes it all“The first to arrive is the first to take it. Netflix and Uber are not that complex, but they were the first to position themselves in the market. They are based on a product that was innovative in its time, it was a solid product.
What if you can’t forget it for the world? The product doesn’t mean technology. Product is the design of your value proposition; how you produce it and deliver it to the customer, while technology is a trailblazer. You also need to be very clear about what elements or externalities your product will take into account and how quickly you need to get it to market. Just like how error-free or perfect it has to be for its market launch and how reproducible it can be.
Valiot is a great example of the importance of producing your business and generating value, technology and scalability. We hope you found this article helpful and that you have a chance to read the columns for the other features.