How to decide what your next market should be

A prospect asks for a feature. A big logo shows interest from an unexpected vertical. An investor says “you should expand internationally.” A salesperson brings in a deal from a segment you’ve never targeted. And suddenly the roadmap bends toward the loudest opportunity.

This is how most companies “choose” their next market. Not through deliberate strategy, but through a series of reactions to whatever showed up this quarter. And it’s one of the most expensive patterns in B2B SaaS — because choosing the wrong market doesn’t just waste the resources you invest in it. It fractures the focus you need in your core.

Deciding where to expand is one of the most consequential strategic decisions a leadership team makes. Here’s how to approach it without stumbling into the wrong one.

Before You Look Outward, Check If You’re Actually Ready

The first question isn’t “where should we go?” It’s “should we go anywhere yet?“

If you’re still winning your core segment, if growth is strong, win rates are healthy, and there’s still room to deepen your position then expansion isn’t the move. Going deeper in a market you’re already winning is almost always more efficient than spreading into a new one.

Can you defend your core?

But there’s a harder version of this question that most founders skip: even if growth is slowing, have you actually nailed your core? Do you have the reference density, the whole product completeness, and the competitive position that makes your core segment defensible? Because expansion doesn’t just require resources, it divides attention. And if your core isn’t locked down, that divided attention creates an opening for competitors to take the one market you’ve already won.

I’ve seen this happen more than once. A company with a strong position in one segment starts chasing an adjacent opportunity. Energy shifts. Product priorities split. The sales team’s focus dilutes. And six months later, a competitor who stayed focused has closed the gap in the core, while the expansion hasn’t gained enough traction to justify the cost. You can’t expand from a position you can’t defend.

Expansion makes sense when your current segment is genuinely saturated and defensible. When you’ve captured most of the addressable buyers and growth is flattening despite strong execution. When a structural constraint (regulation, geography, market size), limits further growth. Or when your category is maturing and the competitive dynamics are shifting from product differentiation to efficiency and consolidation.

If the real reason you’re considering expansion is “growth slowed this quarter” or “we want a bigger story for the board” then you’re reacting, not strategizing. And reactive expansion is how companies end up spread across three segments without winning any of them.

Start With Where You Win, Not Where the Market Is Big

The biggest mistake I see in expansion planning is evaluating markets based on size alone. The TAM slide looks compelling. The opportunity feels massive. But market size tells you nothing about whether you can actually win there.

Instead, start inside. What is your true core differentiation? Not your features, but the deep capability that you’re unusually good at, that competitors struggle to replicate, and that customers consistently value? Then ask: which adjacent market suffers from a painful problem that values exactly this capability?

Expansion works when the new market values your existing strengths. Not when you have to reinvent them. A €50M market where your current proof and product are 80% of what buyers need is a better expansion target than a €500M market where you’d be starting from scratch.

Your deal data is the best starting point here. Where do you actually win today? Which segments convert fastest? Where do customers stay longest? Where does your team sell with confidence? The patterns in your own numbers usually point to the adjacent market worth committing to, long before any external market research does. If you want to put numbers on it, how to size your market goes beyond TAM, SAM and SOM.

In client work, I start with the company’s own deal data: which segments it already wins in, and at what deal size. It’s usually the quickest way to see which market is closest. How I work with evidence →

Evaluate Adjacency Honestly

Not all expansion is equally risky. The distance between your current market and the next one determines how hard the move will be.

There are three dimensions of adjacency:

1. The buyer (same problem, different type of buyer)
2. The problem (same buyer, new use case)
3. The industry (different vertical, similar operational structure).

The safest expansions preserve at least two of the three. You’re entering a new vertical, but the buyer has the same role and faces a similar pain. Or you’re solving a new problem, but for buyers you already know and have references with.

The riskiest expansions change all three at once: new buyer, new problem, new industry. That’s not adjacency. That’s starting over. And starting over in a new market while still running your core business is extraordinarily difficult for a team of 20-80 people.

Be honest about which type of move you’re making. The most common mistake is treating a “starting over” expansion as if it were an adjacent one and then being surprised when it requires ten times the investment to get traction.

Four kinds of expansion

Most expansion moves fall into one of four types. Each changes something different.

• New industry
  Same buyer and problem, different vertical. Usually the closest move.
• New use case
  Same buyer, new problem. The relationship exists; the risk is building for a job you haven’t validated.
• Upmarket
  Same problem, bigger buyer. The deal size is attractive, but buyers, proof and sales motion all change.
• New country
  Same buyer, different market. In Europe especially, every border is a real market entry.

Check Whether the Market Is Actually Ready for You

A market can be large, adjacent, and perfectly aligned with your capabilities and still be the wrong choice if buyers aren’t ready to act.

The question isn’t just “is this market big enough?” It’s “is this market in enough pain to switch?” Look for signals that create switching energy: deprecated systems that need replacing, compliance changes that force re-evaluation, rapid operational shifts that make the status quo untenable, or a segment where the existing solutions are visibly failing.

If customers in the new segment are comfortable with their current approach, if inertia is high and there’s no forcing function, you’ll burn months and budget trying to create demand that doesn’t exist yet. Markets don’t open because they’re big. They open because they’re in pain. And the timing of that pain matters as much as the size of the opportunity. Urgency is often the variable that decides it.

Validate Before You Commit

Before declaring “we are entering this market,” run a real test. Not a TAM analysis. Not a positioning exercise. An actual engagement with the segment.

Have 10-15 genuine conversations with potential buyers in the segment. Run 2-3 serious sales cycles. Attempt at least one real deal. Map the gap between what your product delivers today and what the segment actually needs like the integrations they expect, the compliance standards that apply, the procurement process they follow, the support model they require.

If traction in those early conversations requires extreme customization and if every deal needs something different from what you’ve built, that’s not adjacency. It’s distraction dressed up as opportunity. And the cost of pursuing it will far exceed the revenue it generates.

The goal of validation isn’t to prove the market is big. It’s to prove the gap is small enough that you can win there without bending your product, your team, and your roadmap beyond recognition. And if a first attempt stalls, find out why before you pull back.

Your Goal Isn’t Presence. It’s Dominance.

When you enter a new segment, the bar isn’t “can we get some deals there?” It’s “can we realistically achieve 30-40% share of a defined niche within that segment?”

That sounds aggressive, but it’s the threshold that makes expansion actually work. Below that, you’re a secondary player. Present but not dominant, winning occasional deals but never building the reference density that creates a flywheel. Above it, you become the obvious choice. Referrals start flowing. New prospects hear your name before they start evaluating. The sales cycle shortens because your reputation in the segment does half the work.

If you can’t see a realistic path to that kind of density in the segment you’re evaluating, it might not be the right target. Not because the opportunity isn’t real, but because you’d be spread too thin to achieve the dominance that makes expansion compound.

Check Whether Your Operating Model Can Handle It

One more dimension that gets overlooked: does the new segment require a fundamentally different way of operating?

If you’re moving from relationship-driven, consultative sales to volume-driven, standardized sales or the reverse, that’s not just a new market. It’s a new operating model. Different sales skills, different pricing structures, different product roadmap priorities, different support expectations. Blending two incompatible models under one roof creates internal chaos that’s hard to see from the outside but corrosive from the inside.

If the new segment requires a dramatically different motion, be honest about it. Sometimes that means separate teams, separate go-to-market, even separate positioning. Sometimes it means the segment isn’t worth the organizational complexity it would create, at least not yet. It also changes what you need from marketing.

The Pattern That Actually Works

The companies that get expansion right share three characteristics.

• They leverage their existing core differentiation instead of inventing new ones;
• They target a painful, underserved niche where they can realistically dominate;
• and they go narrow before they go broad. One segment at a time, with clear criteria for when to move to the next.

The companies that get it wrong are the ones who let TAM slides, investor pressure, or one exciting deal pick their next market for them. They end up in segments that look promising on paper but require so much adaptation that the expansion drains resources from the core without building anything sustainable in the new direction.

Choosing your next market isn’t about finding the biggest opportunity. It’s about finding the closest one: the segment where your existing strengths, your existing proof, and your existing understanding of the buyer give you a structural right to win. That’s not the most exciting answer. But it’s the one that actually leads to growth.

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