Creating a product the market wants is key to startup success

Woman sitting at a desk in a fashion design studio (Shutterstock)
(Shutterstock)

Thinking about starting your own business?

“Great innovation comes from identifying real problems and finding solutions,” says Juan Sabater, a partner at Valor Equity with over 20 years of private equity investing and investment banking experience.

Juan Sabater (Courtesy photo)
(Courtesy photo)

Sabater recently held a live Facebook chat with the YLAI (Young Leaders of the Americas Initiative) Network on the challenges of starting a company and how to overcome them.

“[B]ringing great people together who believe they have a purpose” is the first step to creating a successful startup, he said. Next, create “a product that is differentiated and the market wants. If you can solve these two problems you can create a great product.”

Sabater, who was born in Puerto Rico and moved to New York in his teens, sought to gain business experience after studying law at Stanford University in California and serving in the U.S. Army ROTC (Reserve Officers’ Training Corp) program. He was a managing director with Goldman Sachs and later became an early investor and co-chairman of the Board of Augeo Affinity Marketing, Inc., based in Minnesota.

During the Facebook chat, Sabater advised on several startup topics, including preparing effective pitches for potential investors and donors.

Natalia from Uruguay asked how to create a strategic non-profit fundraising pitch for potential donors. Sabater advised starting with the impact. “Tell people how you are making a difference and connect it with their organization's mission.”
Filipe asked what key topics should be in a 4-minute pitch to investors. Sabater responded: “First, the team and why they are special. Then the market, and why it is large. The product and why it's differentiated. And the opportunity and why it's unique.”

A participant in Haiti asked Sabater how to successfully raise money for his youth organization via the internet.

Pierre from Haiti asked what is the best way to fundraise on the web. Sabater responded, “Raising money from the web is tricky. Many people get lots of messages from lots of sources. It's hard to know what is real and what is not. To differentiate you need a validator. It can be a brand, an organization, a referral. These organizations can help you build credibility.”

An entrepreneur from Guatemala asked for ideas on expanding services offered by his internet cafe.

Sabater said, “First, invest in your core product. Before you start adding other things, make sure you have maximized the opportunity from your core product. Second, listen to your customers. Use that feedback to introduce new products, but do it at a measured pace.”

Other participants asked how they could foster stronger entrepreneurial environments in their countries.

Vladimir, who wants to create more green jobs in renewable energies in Colombia, asked how to improve the entrepreneurial environment in Colombia. Sabater answered, “Developing an entrepreneurial culture is hard and takes time, and we are all ambassadors for the development of that culture. In Colombia there is a great tradition of small businesses and you need to leverage that tradition to introduce entrepreneurs to the opportunities that can arise from sustainable and green enterprises. In the U.S. we do that by first showing people the economic potential; how you can create a great company. Then we get people excited about the mission of the company. Third, we educate people on the problem we are solving. And last, we tell people about the returns that can be achieved. This leads to funding."

Sabater also reassured participants that they were on the right path to success.

Jeff, who is developing a pig farm in his community in Haiti, asked what is the best way to realize our dream? Sabater, who happened to have invested in a pig farm, said, “I know that raising money for this or any business in Haiti is hard. There are a lot of people who want you to succeed. Why? Because they will benefit from your business. You provide a great protein source and create jobs. Go to the people who want you to succeed and partner with them. Remember you are solving a real problem: providing a quality food source to a community.”Erich from Cuba asked Sabater what he thought of his web product to improve Cubans internet access via email. Sabater responded that “great innovation comes from identifying real problems and finding solutions. You clearly have identified a very real problem and you clearly have a lot of people who are looking for a way to overcome those challenges. The adoption rate and ease of use are key. I wish you luck. I am certain your product will evolve as you address these issues.”

For more tips on starting a business, see 5 tips for starting a business and Boost your chances of startup success with these experts’ advice.