Investments can be important for companies. Why do investors invest? What are they looking at?

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Does Steemit need investors?

What is Steemit trying to do?

What is the initial purpose?

I think (correct me if I'm wrong) from the Evil Plan for Cryptocurrency World Domination, the short-term goal is to get STEEM bootstrapped to get more people to use it. Then the idea is that as more people have STEEM, more people will use STEEM as a currency in markets to buy and sell goods and services. OK. How does that happen?

Many people are focused on that goal, and in order to achieve it they are seeking to do whatever they think will promote the achievement of that goal. Therefore, some have adopted the position that Steemit is to focus on becoming popular so that people use STEEM by having STEEM and getting it distributed to more people through popularized means.

To make Steemit popular, the focus is on popular content topics. Is that all that is required? To get what is popular to be the main focus on Steemit, so that what is popular can get rewarded and attract more people to post to try to get rewards for the content related to things that are popular in society, and that attracts more people, on and on?

If more people come and post and get rewards distributed, does that increase the value of STEEM?

If people think it does and they buy more STEEM, then indeed that is all that is required. If more people come, and more users use Steemit, then that make Steemit more attractive as a potential investment, and more people will buy the STEEM token believing it is a valuable investment, right?

Isn't that what happened in July? A new popular thing opened up and many people rushed to it at first in their perception and belief of it's success due to the popularity it had. But that was a popularity-based psychological bias called the bandwagon effect that didn't last. And then the bandwagon reversed with the "abandon ship" mentality taking effect.

There was a certain appearance to things that made it attractive, but the substance of how things worked in Steemit and some expectations seemed to not pan-out for many users who left shortly afterwards.

Perception and appearances factor heavily in the psychology of decision-making. Appearances (such as popularity) can have things seem one way, but the underlying substantive reality demonstrates something else.

What about investors for increasing the value of STEEM?

If no one buys STEEM for some reason, then there is no money being spent to buy into the "owner shares" behind Steemit. If people aren't buying STEEM based on the appearance of popularity, then why would they buy STEEM?

What are investors interested in when looking to invest in something?

Are investors looking at mere appearances, or are they looking at the substance of the organization?

Why invest in a company?

Investment Profit / Return on Investment

investing means waiting for profit to come back to you, and grow base don value of company or its stock rising

Income / Dividends

is there a steady stream of passive income from the investment, such as dividends

Diversification

investing in a company has a default reason of not put everything in one basket
spread out the risk to improve chances of profit return by investing in different companies

Influence in Company

owning stock allows a vote to influence what happens in the organization

Belief in Management and Leadership

a track record of experience in past business success is an indicator that they have experience and know what how to maneuver a business

Undervaluation

take a gamble on something that has potential to be recognized by the market and boom at some future point

Business Costs / Sales

look at how much the business is spending and how much it is making

Customer

understand what it's like for a customer to use the product or service
does the company actually fill a void in a market
are there better alternatives?
is the product recommendable?
3 types of customer:

loyal promoter
passively indifferent to stay or leave
unhappy detractors

Growth

has there been growth, will there be more growth, does the company understand how to achieve that growth?
analyze sales data to find out of they are distributing more, or if sales are growing "organically" at existing locations

Risk factors

be weary of risks that potentially affect the company's performance and its future growth
are they trying something new instead of tried-and-tested?
are there competitors who are more successful?
established competitors can mean a difficulty breaking into the market
what are the financial needs or future funding requirements to stay-up

Reasons not to invest?

Lack of Honesty About the Organization

not being forthright and a lack of transparency creates disinterest in developing relationship

No "Secret Sauce"

nothing of their own to be "defensible against potential competitors"
having something unique increases likelihood of greater growth compared to competitors who lack the "secret sauce"

No marketing for Products/Services

no identifiable marketing methodologies

Lack of proven success

not having Key Performance Indicators (KPIs) to indicate how cash was used and how future cash is planned to be used to grow the business and revenue

No Proven Sales of Product/Service

having already made something and sold it to someone willing to pay for it
investing is less risky after a company has proven it can sell its stuff

Lack of Vision

founders don't have a clear vision to grow the company
lack of vision makes it difficult to even change and adapt a new vision

Lack of Understanding Competition

believing there are no competitors
how the competition is marketing and selling their stuff
can be a recipe for failure

Imbalanced Production to Sales Qualifications

building something, and selling it, are two different domains that rarely are qualities of expertise possessed by the same person
the team needs people suited for each task

Lack of Dedication

founders need to be 100% dedicated, or else we won't have much faith in what they are willing to do to make it succeed
full time devoted to the business, not other jobs
ideally having invested their own money to create a deeper motivation for success, where it's more humiliating to fail
"fight to the death" to make the endeavor a success

If an organization wants to attract investors, doesn't a product or service need to attract investors?

What is Steemit creating and selling that is the potential for revenue generation?

Does Steemit currently attract investors? Why or why not?

Please voice your knowledge about this and let's arrive at some answers by better understanding what's going on :)

References:

Thank you for your time and attention! I appreciate the knowledge reaching more people. Take care. Peace.

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@krnel
2017-02-12, 12:05pm

What Do Investors Look For and Why Do They Invest? How Does Steemit Relate?