Product Market Fit: The Key for Expanding Your Business Internationally
Hear about the process of internationalization from another founder and now expert.
Dec 12, 2023 · 5 Minute Read 
This article was written by Mana Tech’s Managing Director, Charly Esnal.
You have already validated your business model in your country, conquering the local market, and now you’re thinking about taking the leap by expanding internationally. It’s a fact that almost every entrepreneur dreams of establishing a company abroad.
However, challenges are around the corner when trying to reach foreign markets. In fact, even industry giants have failed in their international journey by thinking they could replicate their entire business model to another location.
So then, what lies behind the unfruitful process of positioning a business abroad? The answer is a lack of product/market fit. This is one of the leading causes why companies, regardless of their size, fail when targeting new territories.
A common mistake for founders is to be overly confident as they have mastered the local market and mistakenly decide to expand based on that presumption. Therefore, if you plan to get onboard an international journey with your startup, you must first figure out some aspects and define the product/market fit for the targeted location.
What’s Product/Market Fit?
Product/Market Fit (PMF) is a concept mainly used by startups, but as we mentioned, large companies can benefit from implementing it when targeting foreign markets. Simply put, it’s when your product fits the market and your target customers recognize the product’s value.
According to the famous entrepreneur and investor Marc Andreessen, “Product/market fit means being in a good market with a product that can satisfy that market.” Another popular definition of the concept is provided by the author of The Lean Startup, Eric Ries:”The moment when a startup finally finds a widespread set of customers that resonate with its product.”
As you can see, there isn’t one standardized definition for PMF, and you’ll find that several other thought leaders have explained this concept from different angles. So, if customers are eagerly adopting your products, and becoming promoters of your brand, you’ve achieved PMF.
However, this doesn’t necessarily imply that the same will occur when expanding abroad. In a nutshell, you can’t expand internationally without a clear value proposition for the new location and without insights into how your product serves the customer’s needs in that market. For that reason, you’ll have to outline new hypotheses from scratch to validate or introduce adjustments to your business model to make it work abroad.
5 Tips For Improving Your Product/Market Fit Before International Expansion
You’ve achieved success in your local market and are now contemplating international expansion. But first, you need to consider the following variables to avoid the common pitfalls in the process and ensure a successful landing into your target location.
Formulate The Hypotheses For Validation
You might have already validated the hypotheses for your business model in the local market. When expanding your company internationally, conduct new market research and formulate fresh hypotheses, even if you’re targeting a location that shares the same language as your home country.
Define The Target Customer
It’s crucial to define or make adjustments to your existing ideal customer profile, as customers’ habits and behaviors are not the same everywhere. You’ll have to implement market segmentation to refine the hypotheses, which is essential when you target large markets like in the US. That way, teams will work aligned with the goals of that new target customer.
Fine-tune Your Value Proposition
Unfortunately, this is one of the biggest mistakes in the international journey of many companies. Avoid falling into the trap of translating the same value proposition to a new market. Bear in mind that what works well locally may not work abroad.
First, you’ll have to identify your potential customers’ goals, pain points, and desires in the new market to fine-tune your value proposition. Then, you need to ask yourself a question and come up with an honest answer. How well does your current value proposition really fit your new targeting customers?
Narrow Your Focus On A Single Vertical
If you plan to land in the vast US market, narrowing the focus is vital. Trying to sell for everyone ends up being nothing for anyone. So, start with a narrow focus and dig deep to become an industry expert in the field. Research your main competitors and their go-to-market strategies to find your ideal fit in the new location.
Work With People Based In Your Target Market
Finding the right partners is key for a successful international expansion. Partner with accelerators and incubators, as they will lead you through the process, providing their expertise and knowledge of the market.
Their programs usually include legal and tax consultancy and also work with governmental associations. Furthermore, they can also help you build a supportive network with other founders and industry experts.
Do You Have What It Takes To Land In The US Market?
Taking your business abroad is a challenging journey where efficient use of resources is essential to succeed. By defining a PMF between your ideal international customer and your product/service, your company will be on the right track to expand internationally, avoiding costly challenges.
However, if you’re still uncertain about your target client in the new market, grappling with the initial pricing, or struggling to translate your value proposition, you may need a strategic partner.
Mana Tech‘s Market Fit program employs a proven methodology that can achieve in 3 months what typically takes companies 18-24 months, all while establishing the initial ecosystem relationships. Partner with us today and start answering those unverified assumptions before venturing to the US market. LET’S CHAT! Send an email to community@manatech.com
