Strategy
8 min read
Five questions to ask before you enter a new market
Expansion is the most expensive way to learn something you could have found out in eight weeks of properly designed research.
Expansion decisions attract far more conviction than evidence. By the time a business case reaches the board it has usually acquired enough momentum to make genuine challenge socially awkward.
These five questions are deliberately uncomfortable.
1. What specifically are we assuming?
Write the assumptions down as testable statements with numbers attached. A surprising number of business cases collapse at this step, because the underlying claims turn out to be directional rather than quantified.
2. Who is already serving this demand?
An empty market is usually a market that has been tried. Find out who attempted it, what happened to them, and whether the reason they failed still applies today.
3. What does it actually cost to serve a customer there?
Logistics, support hours, local compliance, payment terms, currency exposure, and the first hire who genuinely understands the market. These rarely appear in the optimistic version of the model.
4. How would we know within six months that we were wrong?
Agree the kill criteria before you start. A team that has not defined failure in advance will simply redefine success instead.
5. What are we not doing in order to do this?
Every expansion consumes management attention, which is scarcer than capital. The honest version of a business case names what gets deprioritized to make room.
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If any of this sounds like your business, a short conversation is usually the fastest way to find out what is really going on.