Observations
Entering a new segment is not a one-time launch, but rather a series of tests. A Framework for Action.
Imagine two scenarios of your company entering a new industry.
Scenario A: “The Big Bang.” This scenario involves six months of intense preparation, hiring a new team, and allocating a multimillion-dollar marketing budget. On day “X,” you have a loud launch, but three months later, you realize with disappointment that the hypothesis was wrong and the money was wasted.
Scenario B: “A Series of Tests.” Three months of several short, focused experiments with a minimal budget. As a result, you have clear, data-driven information to make a decision: whether to scale up or shut down the project, preserving resources for the next idea.
Which scenario would a rational leader choose? The answer is obvious.
The main mistake when entering a new market is treating it as a “launch.” In the modern world, it’s not a launch but a scientific experiment that must run in several stages. You must “earn” the right to a full-scale launch by sequentially passing several validation gates, each of which provides real data from the market.
This article provides a step-by-step guide for organizing such multi-phase testing. We will break down three key phases that transform risky expansion into controlled laboratory work where you manage risks at every step.
Phase 1: Viability Test (“Is there water here?”)
This is the first and cheapest phase. The goal is not to generate leads or make sales. The goal is to answer one question: “Does this new niche have an acute, recognized problem for which customers are willing to make at least some commitment?” We are not looking for mere “interest”; we are looking for real “pain.”
For this, you don’t need ads or a minimum viable product (MVP). All you need is a phone, LinkedIn, and a well-prepared MVO (minimum viable offer)—a minimally viable offer in the form of a five-slide presentation describing your solution’s concept. Conduct 10–15 problem interviews with decision-makers in the target segment.
Instead of offering to sell, you ask for their expert feedback on your concept. The real test, however, happens at the end of the conversation. Don’t say, “Thanks for the feedback.” You say: “We are forming a group of three to five companies for a closed pilot project on special terms. Judging by our conversation, solving this problem is a priority for you. Would you be willing to participate and sign a letter of intent?”
The response to this question determines the outcome of the test. If, out of ten conversations, you do not receive two to three firm “Yes, let’s discuss the terms,” then there is probably no “water” in this well. You can close the hypothesis and save millions.
However, if you do receive the necessary responses, you will have confirmed the hypothesis. You have also gained your first loyal customers and invaluable insights for the next stage. You have earned the right to move to Phase 2.
Phase 2: GTM Model Test (“Can we build a well?”)
You have confirmed that the niche has “water” — a real, acute need. The second, slightly more expensive phase now begins. Its goal is to answer the question: “Can we build a profitable ‘well’?” In other words, is there a repeatable and economically viable way to acquire customers in this niche?”
At this stage, we use our “3-Week Validation Sprint” framework. We allocate a small budget and form a micro-team consisting of a marketer and a salesperson. Their task is to launch the first hyper-targeted campaign and conduct the first meetings. The main thing we test here is the economics of the go-to-market model. We seek the answer to the question: “What is the final cost of one qualified meeting?”
The criterion for advancing to the next phase is meeting the target acquisition cost indicators. If the cost per meeting aligns with your unit economics, then you have found an effective way to “extract water.” However, if the cost is exorbitant, you need to change the GTM model.
Phase 3: Scalability Test (“Can we build a water pipeline?”)
You have found “water” and built a functioning “well.” But can you supply an entire city with water? The third phase is the scalability test. Its goal is to answer the following question: “Will our economics remain intact as volume grows?”
This phase now takes a full quarter, not three weeks. You take the GTM model that proved effective in Phase 2 and gradually increase investments. You will expand the list of target accounts, raise the advertising budget, and possibly hire the first salesperson who will focus solely on this niche.
The success criterion here is maintaining stable unit economics as volume grows. If you triple the budget and your CAC remains at the same level (or grows insignificantly) while maintaining a healthy LTV/CAC ratio (>3:1), then the scalability test is passed. Your model is reliable.
Only then does the time for the “Launch” come.
It is only after successfully completing all three phases of testing that it is time for “launch.” However, this word now has a completely different meaning. It is no longer a risky leap into the unknown based on faith. Rather, it is a confident, full-scale deployment of a system that has already proven its effectiveness and profitability.
By this point, you have everything: confirmed demand from initial customers, a functioning go-to-market (GTM) model with clear economics, and data proving its scalability. Launching becomes a triumphant moment of systematic market capture, not a moment of fear.
Manage your growth hypotheses the way a venture investor manages a portfolio. Venture investors don’t invest all their money in one company at the idea stage. You provide small pre-seed investments (Phase 1) to test viability. If the team proves itself, provide a seed round (Phase 2) to test the market model. Only after seeing real traction do you enter the Series A round (Phase 3) for scaling.
This framework transforms risky expansion into a controlled investment process. You minimize risks and make data-driven decisions.
