Product-market fit in emerging markets: The three keys to success


Success in emerging markets for startups hinges on adapting to current and future market needs, establishing strategic partnerships with major industry players, and aligning with key performance indicators that reflect partner priorities.
Finding product-market fit (PMF) in emerging markets requires more than a great product — you also need to understand and adapt to your market’s unique and evolving demands.
In this guide, I’ll share the strategies I learned at Classiq about how you can establish a successful foothold and learn to thrive in emerging markets.

1. Balance current and future needs

As a startup founder, you face a critical dilemma: Should you build for today’s market demand, or for future trends? This balancing act is particularly challenging in emerging markets, where customer preferences and market dynamics can shift rapidly.
I’ve found that when you operate in an emerging market, the key is to create a product that resonates with current users while remaining adaptable and relevant for future consumers.
My strategic rule is to avoid investing in products or business models that lack future potential.
One of the unique challenges in emerging markets is that there are limited metrics to gauge success, especially when preparing for future funding rounds. Initially, showcasing innovative technology might suffice, but as the market evolves, demonstrating user traction becomes crucial. This scenario necessitates a nuanced approach where startups need to cater to sophisticated users looking ahead, as well as make calculated trade-offs to stay relevant in the present market.
Accurate predictions about the future are valuable, but they must be coupled with tangible progress in the present to ensure business continuity. It involves a careful blend of visionary thinking and practical execution, where immediate needs are met without losing sight of future goals.
To gain a comprehensive understanding, gather feedback across a wide spectrum. Consider the needs of your current customer base but also potential future users who could drive mass adoption. This feedback helps you fine-tune your product to meet immediate needs while aligning with long-term market trends.

2. Leverage strategic partnerships with industry giants

One of the best ways to find PMF in an emerging market is to strategically partner with established companies who are building products in the same space.

You have the unique opportunity to get eye-to-eye with tech giants right now, and jointly bring products to market — so make these partnerships a top priority when you’re looking for PMF.
Keep in mind that you’ll need to develop your product so it seamlessly integrates with your partners' technology stacks. This compatibility makes your product an attractive choice for enterprises looking to leverage established platforms for innovative solutions.
One effective strategy is to engage in projects that are of interest to your partners. At Classiq, we collaborated with Rolls-Royce, and that partnership expanded to include NVIDIA. This partnership led to groundbreaking research and attracted other enterprises interested in similar projects. Partnerships like these can showcase the capabilities of your product, and they can open doors to new opportunities and markets.
This approach not only elevates your product's credibility but also taps into the vast resources and networks of these established companies. Your partnerships can pave the way for further innovation and market penetration.

3. Establish key performance indicators (KPIs)

In emerging markets, traditional KPIs like user numbers and revenue generated may not always apply — but you still need to establish KPIs to have something to measure your efforts against. This is another area where looking to partners can help.

Understand what metrics matter to your partners and customers, and use those KPIs as your benchmarks.

Getting clear on KPIs is vital for your internal strategy, and also for aligning with your partners' and customers’ goals. Companies in the same industry, like cloud providers, may have vastly different KPIs even if their offerings appear similar. For instance, some may want to leverage research to publish papers or file patents, some may be looking to embed domain experts in an area they believe will be important in a few years, some may prioritize broad-scale adoption across various user demographics, and some may focus on specific enterprise use cases. Recognizing these differences can help you tailor your approach to each relationship.

By defining your metrics, you ensure that all parties involved have a shared understanding of what success looks like. Once you understand your partners' and customers’ KPIs, align your strategy accordingly. If a partner is focused on large-scale adoption, consider how your product or service can contribute to this goal. Conversely, if the focus is on enterprise case studies, tailor your offerings to meet these specific needs. Aligning your strategy this way can strengthen the relationship and increase the likelihood of achieving mutual success.

Be prepared to adapt your approach. Each partner or customer may have unique priorities and performance metrics, and it's important for a startup in an emerging market to be flexible enough to accommodate variations. This adaptability demonstrates your commitment to the relationship and your understanding of the dynamic nature of emerging markets.

The three pillars of PMF in emerging markets

Navigating the emerging markets landscape requires a blend of strategic foresight, adaptability, and collaborative effort. You’ll need to understand these dynamics to unlock sustainable growth and make a lasting impact.

Here are the three keys to finding PMF in emerging markets:

●  Map today and tomorrow: Balance current market needs with future trends to ensure your product remains relevant and adaptable.
●  Leverage strategic partnerships: Forge strong collaborations with industry giants who are building products for your market, integrate your product into their ecosystems and co-create market solutions.
●  Align KPIs: Understand and align with your partners' and customers’ key performance indicators to set clear expectations and drive mutual success.
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