Successful investment in early-stage startups requires a deep understanding of the target market, product, and team. However, many investors tend to make decisions based on guesses without enough research which can be very risky.
First, you need to thoroughly understand the target market and potential customers. How big is the market size? What unmet needs and problems exist in this market that the startup aims to address? Who are the current competitors and what alternative solutions exist in this market? In-depth market research helps the investor better grasp the competitive advantage of the startup's product.
The second key point is evaluating the efficacy and added value of the offered product for customers. Does it really address the customer's needs? Does it have a better solution compared to competitors? Does it create real value for users? The product should be designed to actually create value for customers and meet their needs.
The third important factor is assessing the founding and executive team of the startup. The skills, experience, education, and diversity of the team are very critical. Do they have the required knowledge in the product technology field as well as the target market? Are the team members complementary to each other? Strong and expert teams can guarantee product success.
Finally, it should be noted that investing in and growing a startup is an incremental and iterative process and overnight sensational results should not be expected. Expectations must be sensible and aligned with realities. Progress should be reviewed periodically. With patience and focus on value creation, sustainable success can be achieved.