Investment decision: Product Evaluation

Most investors focus on the product to make an Investment decision, apart from the people, potential and traction in the startup. Here are a few questions that entrepreneurs must be ready to answer while making the pitch.

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What are you developing?

This is the question of “purpose”. Understand the context for the need of the product, how are things being done now and why in a particular way. What will the proposed product achieve, considering the current social behavior of users and available technology

Who is it for?

One can’t design a product that is for everyone in the world, there is no one size fits all. Be sure, which segment of customers are your target – Enterprise/individuals, those who seek luxury/value for money, double income couples/teenagers everyone has different needs. Spreading too thin to cater to every segment will bother stakeholders.

Why do they need it?

The product must simplify something for its user – ease of usage, delivery, transaction, features, pricing etc. Remember that the product must be attractive enough to overcome the inertia of how the user was meeting the objectives without the product earlier.

How will it be implemented?

Execution is the key strategy, Are the resources available or to be arranged? Prioritize the features, look at tradeoffs, what combination of features maximizes the customer satisfaction, profits and aligns with the long term vision of the company.

Do the Math – how much does it take to produce and what will it sell for?

The most important question after getting satisfied with the above questions is, whether it makes business sense to introduce the product into the market. The economical viability must be considered from idea to execution as it will help make critical choices during the product development phase.

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