Big. That’s what startups are told is how they should think and where they should take their companies. Whether you’re an entrepreneur in a large market like China or the United States, a medium sized one like Turkey, or a small one like Uruguay scale, particularly on a global scale, is part of every entrepreneur’s strategy.
Yet scaling globally is easier said than done. That is especially true in medium to small-sized markets. Entrepreneurs in these places may feel like they have a disadvantage; that expansion into other markets is harder to achieve. Interestingly, it’s the entrepreneurs in medium to small sized markets that master expansion better than those in large markets. Why? They’re already aware of their limited market size and push beyond it. So lesson #1: Mindset is everything. When you feel like you have to beat the big guy, you work harder. And that’s a great start.
But scale and expansion require so much more. Here is a series of insights we’ve gathered over the years on scaling and expanding globally successfully. I’ll be sharing it over the next few days.
This is one that many get wrong. Market size is not the total population. It’s the total number of people that will use your product — or have a need for your product. That need depends on who is already there. For example, breaking into China is every entrepreneur’s dream. Yet, if you’re an entrepreneur with a hardware product, such as a smartphone or another electronic device, you’ll want to think twice. China is inundated with tech gadgets and has mastered several home brands of its own. That’s the same for ride-hailing app companies. The Didi and Uber story should tell you everything.
Now, if you’re an entrepreneur with a product or service that is absent from China or another big market, you stand a better chance. First to market has advantages. Better yet, first to a smaller market has even bigger advantages. Here, we’re going to tell you to think small.
Because “big” is the refrain drilled into an entrepreneur’s brain, they often think of big markets, such as China, the U.S., India. A successful entrepreneur will recognize that the opportunity isn’t in big, but where he or she can get the most traction. More than often, that’s in a smaller market. Smaller markets are more flexible to operate in; there is less bureaucracy. They are also easier to go from zero to market leader faster. It’s simple math — a market of hundred. million is easier to dominate than a market of 1.2 billion.
Next, we’ll talk about market development and dynamics.