You’re a CEO or executive at a company considering expanding to a new country. The big question is: Should you allocate scarce resources to explore uncharted territories or double down on your current market?
At Startbutton, we frequently encounter companies grappling with this dilemma. Some are even contemplating a pivot in their product offering. If you find yourself in this situation, expanding into a new market might be a strategic move worth considering.
Before making this pivotal decision, carefully evaluate these three crucial factors:
Finding product market fit never ends
Product-market fit (PMF), the degree to which a product satisfies a strong market demand, is a very popular term in the startup world. Typically the common belief is that finding PMF is done at the early stages of a startup but what happens when you’re an established business that has already found PMF? The truth is that finding product market fit never ends.
You need to evaluate whether your product is still fit for the current market you’re in or other markets.
Let’s say for instance, you’ve made headway in Nigeria, one of Africa’s largest markets but now business is starting to slow down due to macroeconomic factors, it might be wiser to consider neighbouring smaller markets like Ghana or Benin. Your product is still a fit for Nigeria but you need to find out if it’s a fit for other markets.
To determine that, you need to quickly launch the same product in another market and test its reception. Using a product like Startbutton can make this process seamless as it allows you to launch, build and sell in 10 African countries in a compliant manner without upfront costs and the need to open a physical office.
We’ve seen cases of businesses that launch in Nigeria and then see the purchasing power is low such that they won’t be able to make plenty of money, but they try out a smaller country like Ghana where they’re now doing more transactions.
Outgrowing your market
With time every market gets saturated as new players enter the space. This implies that you need to constantly consider whether you’ve outgrown your market and that it’s time to look for greener pastures.
We once worked in a fintech startup that wasn’t getting additional traction from its key market because the competition was stiff. Instead of deploying its resources to fight for market domination, the startup decided to try out a smaller market and the response was favourable.
Dealing with Regulations
African governments are known for introducing unexpected regulations that can significantly impact businesses. To mitigate this risk, diversifying revenue streams across multiple markets is crucial.
In today’s interconnected world, if one market’s regulations hinder your business, seek out markets with more favourable regulatory environments.
Pay4Me, a fintech startup that provides tuition and fee payment solutions, was caught in a similar situation in 2022 when the Ghanaian government changed a regulation, forcing their business to a standstill. Fortunately, they found Startbutton and used our market expansion solution to help expand to other markets like Kenya and Uganda, opening up new revenue streams.
Conclusion
Do any of these three points resonate with you? If so, then you should try expanding to new markets.
Ready to expand your business to new African markets? Startbutton makes market entry seamless with tailored cross-border payment and compliance solutions. Discover how we can help you expand and thrive. Visit us at www.startbutton.com or email us at [email protected] to get started today!
