How Do You Decide Which New Markets or Segments to Go After
Deciding Which New Markets or Segments to Target — A Framework
Growth often comes from expansion — into new geographies, verticals, or demographic segments. But chasing everynew opportunity is a fast path to dilution. You need a clear, repeatable method to decide which new markets or segments to enter first.
Frameworks for Evaluation
- TAM / SAM / SOM — total, serviceable, obtainable market
- Ansoff Matrix — market penetration, market development, product development, diversification
- Attractiveness vs Feasibility matrix
Quantitative & Qualitative Criteria
Quantitative:
- Market size & growth rate
- Willingness to pay / ARPU potential
- Penetration ease (cost to acquire, regulations, barriers)
Qualitative:
- Strategic fit (does this market align with vision?)
- Competitive landscape
- Access to distribution / partners
- Regulatory / compliance hurdles
- Cultural / localization challenges
Prioritization & Sequencing
- Score candidates on your criteria
- Use a 2×2 (Attractiveness × Feasibility) map
- Consider “beachhead” segments as proof points
- Pilot in smaller markets first, then scale
Risks & Mitigation
- Underestimating localization costs
- Overestimating initial traction
- Regulatory delays
- Cannibalization of existing markets
Illustration
Suppose your product is a remote education platform currently in U.S. K–12. You might evaluate expansions like:
- International (India, Brazil, etc.)
- Corporate training / L&D market
- Adult continuing education / certification
You’ll score each candidate, pilot small, learn, then expand.
Summary & Guiding Questions
Ask yourself:
- Which market gives us the most upside with least unknown?
- Do we have partners, distribution, or brand strength there?
- What’s our fallback if it doesn’t work?
