Market Entry Framework for Product Companies
The big question for product founders/leaders is which market should I enter/expand
This market-entry framework will help you answer the question
Firstly, take a country as a unit v/s a region. Plan to launch in a country. Not in a region (Eg: EU).
Every country is unique.
What works in Australia might not work in Singapore
Now, back to the framework
I will explain it with an example of eCommerce Software (the product helps brands to set up their online store)
Below are the dimensions of the framework.
For every country, you have to give a score for a dimension (5 for Highest and 1 for Lowest)
1. What is the TAM (Target Addressable Market)
It’s very hard to find Target Addressable Market by “product revenue”
So one proxy is your Industry TAM?
For eCommerce, retail was the industry. We found out the retail market size and scored the countries highest for countries which had a biggest retail market size
If X% of the revenues is invested in your product, X% * industry market size gives you the product revenue TAM.
Eg: Companies spent 0.05% of their revenues on eCommerce software. We used this to find the product revenue TAM
2. The Demand
The best indicators for demand from a country are the number of inbound signups, push from existing countries, search volume (use keyword planner in AdWords).
Higher the demand, the better the score.
3. Market readiness/maturity
How ready is a country to accept your product? In other words, what is the maturity stage of a country?
For our product, we had three stages in the maturity curve
Basic: companies with a digital catalog, website & social presence
Intermediate: Has basic eCommerce store
Advanced: Has omnichannel store with 1000+ monthly orders
The product was suited for companies in the intermediate stage.
We gave a higher score to countries that had more companies in the intermediate stage
4. Product readiness
How ready is your product for a country? Better the readiness, better the score.
For eCommerce, we needed integration with local logistics and payment gateways.
5. GTM readiness
How ready is your GTM strategy (sales, customer success, partnerships) for a country launch? Better the readiness, better the score.
6. Competition Intensity
You will find local (startups, agencies) and global competition.
Find out how strongly entrenched they are in a country.
The stronger the competition, the lower the score for a country.
7. Regulatory environment
Some countries are strong in regulatory stuff.
Lesser the regulations, the better the score.
For each country.
Do the scoring for all 7 dimensions
Then a weighted average score can be derived.
The final scorecard will help you to prioritize the country launch
Apart from the score, use qualitative inputs to make the final decision.
This simple framework can bring a method to GTM madness :)
