Much like a fledgeling bird testing its developing wings, or a teenager steadily outgrowing a cramped bedroom, the time comes when founders begin to feel the call of the wider world outside their home market.

But timing is often crucial. Move too early, and your still maturing business may overstretch its resources and struggle to compete. Leave it too late, and other rivals may have already established beach heads and eaten into your potential customer base. 

In our opinion, you should begin to look outside the borders of your home market when: 

YOU’VE ACHIEVED YOUR FIRST PRODUCT-MARKET FIT

Your home market is the place you know best. It’s where you cut your business teeth and built your professional reputation. It’s the home of most of your contacts. You understand its people, because you are one of them. 

Most B2B SaaS founders find their first customers in their home markets. A strong relationship with these first customers can really help founders move towards their first Product Market Fit (PMF), as they can quickly receive quality feedback from people they know, understand, and trust.

With this open dialogue as your guide, when you have a clear understanding of the customer, their needs, and the type of product that delivers the most value to these customers, you are likely close to the first iteration of your PMF. 

YOU’VE VALIDATED YOUR DOMESTIC GO-TO-MARKET MODEL

It makes sense to focus on PMF first, as you will have a solid foundation from which to build your Go-To-Market (GTM) model at a later date. If you try to expand in your home market without PMF, you’ll likely find it hard to convince customers outside of your inner circle of the value of your solution. 

It will also be much more difficult to choose the GTM model that best suits your product. If you, for example, put all your eggs in the Freemium basket, then find out later on that your product is better suited to the longer, more hands-on buying processes and higher ticket prices of enterprise customers, then you’ve likely wasted a lot of time and energy (and runway) and have a serious pivot in your near future.

IN SUMMARY…

Work on a solid Product Market Fit and a viable Go-To-Market model in your home market before you begin to look across borders. With both in place, you should see an increase in the amount of ARR you are able to capture. You can then begin building the team and resources you need for an international push, and you will also find it easier to secure investment to fund expansion.

Also, be honest about the kind of business you are building – are you chasing that high valuation, or do you want to lead a lifestyle business? The journey to growth is not a narrow staircase – it’s a rock face with multiple routes. Whichever path you choose, it’s worth remembering that faster is generally better, as you will learn more quickly and progress further. Your competitors are thinking the same way.

Who answered the question?

Timo Felin

Investment Director