{"id":20460,"date":"2026-04-01T11:11:38","date_gmt":"2026-04-01T11:11:38","guid":{"rendered":"https:\/\/ideainthebox.com\/index.php\/2026\/04\/01\/the-best-customers-to-study-when-scaling-into-a-new-market\/"},"modified":"2026-04-01T11:11:38","modified_gmt":"2026-04-01T11:11:38","slug":"the-best-customers-to-study-when-scaling-into-a-new-market","status":"publish","type":"post","link":"https:\/\/ideainthebox.com\/index.php\/2026\/04\/01\/the-best-customers-to-study-when-scaling-into-a-new-market\/","title":{"rendered":"The Best Customers to Study When Scaling Into a New Market"},"content":{"rendered":"
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Carolyn Geason-Beissel\/MIT SMR | Getty Images<\/p>\n<\/figcaption><\/figure>\n<\/p>\n

For tech companies worldwide<\/span>, expanding into a new market is both a rite of passage and a moment of truth. It represents the transition from early promise to meaningful scale \u2014 an opportunity to increase revenue, signal growth potential to investors, and unlock powerful sources of differentiation, such as network effects and economies of scale. <\/p>\n

But for every company that expands successfully, many more struggle. Some push into new geographies or industry segments only to stall; others retreat quietly, having learned \u2014 too late \u2014 that the customers they thought they understood weren\u2019t the customers who would ultimately drive growth.<\/p>\n

Expansion is hard, not only because new markets differ but because the assumptions guiding early choices often travel poorly across borders, industries, or segments. A product that resonates with users in one environment may fall flat in another, even when the differences seem minor on the surface. Many companies do not have the luxury of long research cycles or deep field teams. Instead, they learn fast, often improvisationally and typically through their earliest customers, their beachhead market. <\/p>\n

These first users shape a company\u2019s understanding of demand in the target market. But despite these users\u2019 centrality, executives often overlook the strategic choice of which<\/em> early adopters to prioritize. Many leaders assume that early users should come from familiar markets, such as the company\u2019s headquarters country. Others assume that successful expansion requires an immediate leap into the target market, however unfamiliar. Both approaches can work \u2014 and both can fail. The real challenge is choosing the right one.<\/p>\n<\/p>\n

My research<\/a>, which drew on global data on over 1,000 technology startups that was complemented with exploratory interviews and experiments, shows that the decision of which early adopters to target is far more strategic than is commonly appreciated. Early adopters offer information, but that information varies dramatically in its clarity and its relevance. Executives must decide whether to learn from users who are familiar<\/em> \u2014 people whose preferences, norms, and communication patterns can be intuitively understood \u2014 or from target-market<\/em> users, whose preferences match the broader audience the company ultimately wants to reach.<\/p>\n

This choice matters because the two groups of people offer different advantages. Familiar users provide clearer<\/em> signals. Executives understand these users better and can interpret their feedback more effectively. Target-market users, in contrast, provide more transferable<\/em> signals: Their preferences closely align with those of the market the company hopes to serve in the long term.<\/p>\n

Understanding when to prioritize clarity and when to prioritize transferability is crucial. And the answer depends on two factors that vary widely across companies: how similar customer preferences are across markets and how homogeneous or heterogeneous the company\u2019s familiar market is. <\/p>\n

When executives get this choice right, expansion is faster, more efficient, and more successful. When they get it wrong, even strong products can fail.<\/p>\n

Let\u2019s take a deeper look at the research and the trade-offs involved in choosing familiar users versus target-market users, along with real-world examples of how a company\u2019s early-adopter choices shaped its trajectory. While the research focused on companies entering a new geography, the advice here applies more broadly to those entering new industry segments as well.<\/p>\n

The findings offer a simple but powerful principle for tech leaders: Initial users are not just the first audience for your product; they are the lens through which you learn how to scale.<\/p>\n

Clear Sentiment Versus Transferable Lessons: A Strategic Dilemma<\/h3>\n

My research began with a question that many tech executives launching new products undervalue: Why do some companies expand successfully into new markets while others struggle despite having comparable products, resources, and ambition? The research focused on a part of the expansion process often overshadowed by discussions of go-to-market strategy: the identity of the company\u2019s beachhead market. These early customers shape what executives learn, how they refine the product, and how they gauge demand. <\/p>\n

But my research found that the match between early users and the target market is anything but straightforward. I determined that early-user selection is governed by two opposing forces: clarity and transferability.<\/p>\n

Clarity<\/em> refers to how easily a company can interpret the feedback it receives. With familiar users \u2014 those in an executive\u2019s home country, region, or environment \u2014 communication is smooth. Shared cultural norms, language, and expectations reduce noise. A complaint, a compliment, or a hesitation is easier to decode. Executives can infer meaning more confidently because they intuitively understand what these users are reacting to.<\/p>\n<\/p>\n

Transferability<\/em>, meanwhile, concerns how closely those users\u2019 preferences match the preferences of the broader target market. Local users may provide very clear signals that simply aren\u2019t relevant to the intended market. Target-market users, on the other hand, offer feedback that directly reflects the needs of the customers the company wants to serve. But these signals can be much harder to interpret. Differences in language, norms, communication styles, or expectations sometimes obscure signals\u2019 meaning, making it difficult for executives to discern whether feedback is driven by real demand differences or by misunderstanding.<\/p>\n

The tension between clarity and transferability creates a strategic dilemma: Should companies learn from users they intuitively understand, even if those customers\u2019 preferences aren\u2019t fully representative? Or should they learn from users whose preferences will ultimately matter the most, even if doing so is more confusing?<\/p>\n

Examining Customer Preferences Across Borders and Markets<\/h3>\n

The answer to that question depends critically on two factors: how similar or different customer preferences are across markets, and the composition of the company\u2019s familiar market itself.<\/p>\n

To quantify cross-market preference similarity, I built a measure of local fragmentation for different product categories. Categories with low fragmentation<\/em> \u2014 such as software-as-a-service (SaaS), productivity software, and web tools \u2014 tend to have global user bases whose preferences converge regardless of geographic location. A productivity app that works well in Melbourne is likely to work well in Munich. <\/p>\n

Alternatively, categories with high fragmentation<\/em> \u2014 such as language learning, food and beverages, and industrial automation \u2014 exhibit sharp preference differences across markets. What works in one cultural context may not translate to another. <\/p>\n

This difference is fundamental. In globally standardized categories, feedback from familiar users carries a double advantage: It is both clear and<\/em> representative. Companies in these sectors benefit from starting local because local feedback mirrors target-market demand without sacrificing interpretability.<\/p>\n

In locally fragmented categories, however, familiar users may offer misleading signals because their preferences are likely fundamentally different from those of people in the target market. Here, companies benefit from beginning with users from the target market, even if interpreting their feedback is harder, because the mismatch in preferences outweighs the clarity gained locally.<\/p>\n

The similarity between the familiar and target markets also matters. Some markets are simply closer to one another along linguistic, cultural, and historical dimensions. France and the United Kingdom, for example, resemble each other far more than France and Japan do, which means product preferences between the former pair are more likely to overlap.<\/p>\n

The second factor is the homogeneity of the company\u2019s familiar market. Some home markets are culturally and linguistically cohesive, making familiar users highly interpretable. In a market like France, for example, the population predominantly speaks French, so a company based in that country is likely to speak the same language as other users there. Other markets are diverse, with multiple languages and subcultures. In those cases, \u201cfamiliar\u201d users aren\u2019t truly familiar. In India, where more than a dozen languages are spoken, a venture is less likely to speak the same language as a significant number of users there. Thus, even local feedback is harder to interpret, reducing the clarity advantage and strengthening the case for starting with target-market users.<\/p>\n

Together, these two dimensions \u2014 cross-market preference similarity and familiar-market homogeneity \u2014 reveal the trade-off at the heart of early-adopter strategy. They also explain why companies that might appear to be similar from the outside (such as two global software startups) often diverge dramatically in their early-user choices. <\/p>\n

Some companies start close to home; others leap abroad immediately. Both choices can be right, but only if matched to the structure of the business\u2019s product category and the nature of its local environment. Here are two ways to think about these considerations:<\/p>\n

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  • When you are operating in a global product category, start with familiar local users to benefit from their clear feedback.<\/li>\n
  • When you are operating in a locally fragmented product category, on the other hand, start with your target global users right away so you can learn their preferences.<\/li>\n<\/ul>\n

    Real-World Lessons on Choosing Wisely<\/h3>\n

    For managers and founders preparing to expand into new markets, the question isn\u2019t whether early adopters matter. They always do. The question is, which early adopters will help you learn the right things fastest? My findings offer two takeaways, each illustrated by companies whose choices reveal these dynamics in action.<\/p>\n

    1. Why Companies Scaling in Global Product Categories Should Start With Familiar Users<\/h4>\n

    When user preferences are relatively similar across markets, companies can safely rely on familiar users as their initial audience. These users provide clear signals, and because their preferences align globally, the consumer feedback still maps onto the target market. This means that it makes sense to start locally when you believe you are developing a truly \u201cglobal\u201d product. <\/p>\n

    Indeed, in exploratory interviews, one technology company based in Israel discussed the value of starting with local initial users: \u201cIt\u2019s easier: same time zone, same language, same mentality. \u2026 With cultural differences, until we translate American to Israelis, it takes us time to get the actual essence of the feedback. And with Israel, it is just a lot easier because that\u2019s the culture that we are used to.\u201d The venture was developing a SaaS solution that had fairly standardized preferences across a product category with low fragmentation, which meant that any feedback from local initial users was relevant for its target U.S. market. <\/p>\n

    Canva, founded in Australia, is another example of a company operating in a category (productivity tools) with low fragmentation. Designers, educators, and small businesses across countries share remarkably similar needs: easy-to-use templates, intuitive interfaces, and tools that remove friction from creative work. This similarity meant that early feedback from Australian users, Canva\u2019s familiar market, was highly transferable to global audiences \u2014 the company\u2019s target market. Just as important, Australia\u2019s relative linguistic homogeneity gave Canva unusually clear early signals. Feedback was easy to interpret and act upon. By the time Canva expanded globally, it had already refined its value proposition through an initial group of target users that offered clarity without sacrificing representativeness.<\/p>\n

    2. Why Companies Competing in Locally Fragmented Categories Should Start With Target-Market Users<\/h4>\n

    When consumer preferences vary widely across countries, familiar-user feedback may be clear but misleading. Companies in these categories benefit from beginning with users in the target market: You can learn the right preferences early, even if interpreting that feedback is more challenging. This means starting with your target global users when you believe you are developing a \u201clocal\u201d product.<\/p>\n

    To this end, another technology company based in Australia expressed concern about relying on local users to learn about demand in its target foreign markets. So it sought target-user feedback right away: \u201cIf we take too long [to go abroad] \u2026 then we can potentially box ourselves in as a product and then just find it harder and harder to \u2026 adapt the product for an international market.\u201d The company was creating a technology solution for the construction industry \u2014 a locally fragmented product category exhibiting large differences in user needs across countries. Initial users in Australia could have fundamentally different preferences than international target-market customers. <\/p>\n<\/p>\n

    Grammarly, launched in 2009 as an English writing assistant, serves as another example of a company operating in a more locally fragmented product category. Grammarly was built in Ukraine, but its target audience wasn\u2019t local Ukrainians \u2014 it was international students, professionals, and English language learners in English-speaking markets, particularly at universities. Writing norms, educational expectations, and communication styles differ considerably across countries, making this a high-fragmentation product category. Had Grammarly relied primarily on local Ukrainian users, whose English proficiency patterns, contexts, and expectations differ from those of people outside of Ukraine, they would have received clear but poorly transferable signals. Instead, the company went directly to its target users in English-speaking countries. This allowed Grammarly to quickly understand the challenges that actual global users faced, shaping the product road map and accelerating the tool\u2019s adoption in the markets that mattered most.<\/p>\n

    Four Decision-Making Steps to Follow<\/h3>\n

    Use this four-step process to apply the lessons I described above to your company\u2019s situation as you clarify which early adopters to target.<\/p>\n

    Step 1: Define your target market with precision.<\/strong> Many companies expand too broadly or vaguely, targeting \u201cglobal customers\u201d without identifying the specific segment or geography that matters most. Begin by answering the question \u201cWho exactly are we trying to reach?\u201d Is the target market your home region? Another country? A specific language group? A niche industry? This clarity should anchor all subsequent decisions.<\/p>\n

    Step 2: Assess cross-market preference similarity.<\/strong> Ask, \u201cHow similar are customer preferences in my familiar market to those in the target market?\u201d<\/p>\n

    Indicators of high similarity include these characteristics:<\/p>\n

      \n
    • The product category is widely globalized (such as for productivity software).<\/li>\n
    • Existing competitors serve multiple markets effectively.<\/li>\n
    • Customers across markets cite the same pain points.<\/li>\n<\/ul>\n

      Indicators of low similarity include these factors:<\/p>\n

        \n
      • Strong local brands dominate multiple regions.<\/li>\n
      • Cultural norms shape product usage (such as communication styles or food preferences).<\/li>\n
      • Customer needs differ meaningfully across countries.<\/li>\n<\/ul>\n

        If similarity is high, familiar users may be enough. If similarity is low, target market users are essential.<\/p>\n

        Step 3: Evaluate how homogeneous your familiar market really is.<\/strong> Even in globally standardized categories, the familiar market must offer clear signals. Ask:<\/p>\n

          \n
        • Is my local market culturally cohesive?<\/li>\n
        • Do local users share language, expectations, and norms, or is the market diverse, segmented, or multilingual?<\/li>\n<\/ul>\n

          If your familiar market is heterogeneous, clarity drops \u2014 and target-market users may become the better choice.<\/p>\n

          Step 4: Combine the two dimensions to identify your beachhead market.<\/strong> Follow these simple rules:<\/p>\n

            \n
          • High similarity + homogeneous familiar market \u2192 Start with familiar users<\/li>\n
          • Low similarity + heterogeneous familiar market \u2192 Start with target-market users<\/li>\n<\/ul>\n

            This is the core decision. And, once you commit, ensure that early-user engagement is deliberate: Get specific feedback, iterate quickly, and avoid the trap of overgeneralizing from a misaligned early group.<\/p>\n

            Learn From the Right People at the Right Time<\/h3>\n

            Market expansion is one of the most defining and difficult stages of business growth. While executives often focus on marketing strategy, product localization, or competitive positioning, my research shows that the selection of initial users is crucial. This choice is especially pivotal for companies in smaller markets: They may face pressure to rush into larger ones and, in doing so, skip the local early users who would have given them clearer signals to build better products.<\/p>\n

            The companies that expand successfully aren\u2019t simply those with the best products. They\u2019re the ones that learn from the right people at the right time. By understanding the clarity-transferability trade-off, executives can make more strategic early-adopter choices \u2014 and scale with far greater confidence.<\/p>\n<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

            Carolyn Geason-Beissel\/MIT SMR | Getty Images For tech companies worldwide, […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"content-type":"","footnotes":""},"categories":[194],"tags":[],"class_list":["post-20460","post","type-post","status-publish","format-standard","hentry","category-graphic-design"],"acf":[],"_links":{"self":[{"href":"https:\/\/ideainthebox.com\/index.php\/wp-json\/wp\/v2\/posts\/20460","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/ideainthebox.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/ideainthebox.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/ideainthebox.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/ideainthebox.com\/index.php\/wp-json\/wp\/v2\/comments?post=20460"}],"version-history":[{"count":0,"href":"https:\/\/ideainthebox.com\/index.php\/wp-json\/wp\/v2\/posts\/20460\/revisions"}],"wp:attachment":[{"href":"https:\/\/ideainthebox.com\/index.php\/wp-json\/wp\/v2\/media?parent=20460"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ideainthebox.com\/index.php\/wp-json\/wp\/v2\/categories?post=20460"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ideainthebox.com\/index.php\/wp-json\/wp\/v2\/tags?post=20460"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}