Product Market Fit · Startups

Launch in multiple markets vs single market?

Ema Chuku Designer. Product Developer. Founder @ NuPad

February 10th, 2016

At beginning phase of your startup, the typical notion is to start and focus on a single niche market (city) then expand one market at a time from there... What are your thoughts on launching in a multiple focused market, say different cities, then refine your product market-focus from there? Striving on a notion that launching in different markets would better inform where your products fits best

Fabrice Lorenceau Co-Founder at LiveLike (Techstars'15)

February 10th, 2016

I recommand reading "Crossing the Chasm" which explains pretty well why you should start with a niche market (including geographically). Like Eric Levenson said, this allow you to focus your effort and validate the value proposition.

Start 'small' even if this means you expand after just a couple of months and you get proper validation on your initial target.
I am sure there might be exceptions but overall I think it is a good rule.

Eric Levenson

February 10th, 2016

Honestly, launching in multiple markets (unless each market is super tiny) is a terrible idea. It spreads your resources way to thin when you are trying to figure out product market fit. How can you handle multiple places when you dont event know if the idea is gonna work at all (from sales to marketing to customer service to pretty much everything). If it doesnt work in the one market you are going after then it most likely wont work anywhere otherwise what made you think that was the right market to target first to begin with. Figure out a playbook and then replicate it but make sure the playbook works all the way through not just with user growth. Especially if its a business thats not just built on eyeballs but on selling something. In other words figure out how to make your one market P&L look good before going to other markets (you can exclude shared services from that P&L as that cost will be spread amongst all your markets).

John McArthur President of Walden Technology Partners, Inc.

February 10th, 2016

I always recommend launching in a single market first. If you have done good customer research before developing and launching the product, then you already know you've got a wanted/needed product and you can focus on perfecting your marketing, sales and support processes, which lead to high customer satisfaction. Word-of-mouth marketing from happy customers will then become one of your greatest assets enabling you to expand to other markets.

Ignacio Evia CEO at Diet Line Latin America

February 11th, 2016

I also recommend to launch in a single market, but not to wait too long before launching elsewhere. My experience was that we launched in a medium size city and wanted to refine too much the model so it would be perfect for other cities. It turned out that that specific market was not the best one for us, as soon as we decided to launch in another market it took off and just until then we were able to really refine the business model. 

In short, don't try to be everywhere when launching, so you can be really close to the activity and make quick fixes, but also don't be shy to launch in other places as soon as possible. 

Eric Sullivan CEO at FoundationLab

February 11th, 2016

I would think that it comes down to your ability to execute in multiple markets at the time of launch. Typically a start up has limited resources and money. So with both being limited can you properly execute to get enough traction to learn what you need to know? Also remember first impressions can make or break you so its better sometimes to launch to a smaller group and learn any big initial pitfalls and fix those then expand further. If you go too big you may ruin the reputation if the product did not hit the mark and deliver enough value to its end users.

Casey Xiao-Morris China Business Consultant I Seasoned China B2B and B2C Expert

February 10th, 2016

I will assume that it is a product-based start-up.  If it is a online business, my answer may be different.  Launching in a single market makes sense until you are in the process of testing a proof of concept. Multiple markets will provide you with enough market data, that guide you the next steps.  As an international business consultant,  I rarely recommend that a start-up expand to overseas markets, especially a complex market like China.  Stepping outside of the market you are familiar with will cost you extra resources and time. There is learning curve.  If you believe launching in a single market provides high risks, The next question for you is how many markets should you launch into without using extra resources. Best luck. 

Giles Crouch Digital Behavioural Economist | Speaker | Writer | Technology Strategist | on Twitter @Webconomist

February 10th, 2016

Unless you have a very big launch budget and even then not a good idea. I agree with the others, start with a niche market. Learn. Before you decide which market to start in, determine via research the optimal market. Have Market A and Market B so you have a plan B if the initial launch isn't working.

Darren Naylor

February 10th, 2016

I've got back and forth with the same thought process myself, but I've learned figuring out where the best market is and starting there is the way to go.

I tried expanding too early on before I even knew enough about my business and it ended up causing me to pull back into the city I started in. You need to allow time to learn about the business and customers in one area, get things running smoothly, and then figure out the next best location(s) to move into.

I personally believe that once you've figured out one location that you can start doing multiples afterwards with the knowledge gained. But that would still be up to how well things are going for you.

Just my two cents.

Rob G

February 12th, 2016

Ema, focus is the important part regardless if the initial market is local or remote or multiple.  The focus can be by geography or customer profile.  If your product is entirely digital and "local" (language, culture, habits, preferences, etc.) doesn't buy you much then don't worry about 'local'.  Local helps when you are doing product/market fit work - one tends to get better, more accurate data and it's often easier to get time with your ideal prospects face-to-face than remotely, but that is not a show stopper.  What is key is slicing your market down to a very focused, "ideal" prospect so you learn their needs, market, customers, language, vocabulary, competitors, regulations,  etc.  When they visit your landing page/website they immediately know you understand their needs because you use their same terminology, refer to their competitors, etc.  It's easier to tweak things for 1 market than for 20.  If you are not completely sure of your customers's needs then perhaps start with 2 markets with different needs, but i would not recommend more than 2 or 3 early on.  Working out the 'bugs' in your first 1-3 customer profiles doesn't need to take a lot of time.  Once you have things working well for that initial market then scale up (not out) until you feel you have good penetration and plenty of referenceable customers in this vertical before scaling out.  just my $0.00002 worth.

Katie Curtin-Mestre B2B Tech Marketing Executive

February 10th, 2016

Many of the products I've been involved with in the B2B tech space are horizontal plays since they work across a variety of customer segments and verticals.  However, starting out with a focus on a particular market, whether that is a location, customer segment, vertical, or even use case, typically is the way to go.  This creates tremendous benefits on the go-to-market side since once you've secured a few wins, you have a formula you can replicate until it your are ready to tackle your next market.