Opportunities Of Small Geographical Markets

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Small countries often have to deal with the stigma of a small market not worth going to: Learn how Luxembourg deals with it and why it is worth founding in.

The Market Size Dilemma

Those who have pitched their ventures to potential partners, e.g. investors or strategic partners, have probably often heard the topic of a captive and compelling growth market. In other words the hockey stick issue i.e. without a huge market the option of a high return is low.

If it comes to small countries, they often have to deal with the stigma of a small market not worth going to, and a quickly needed internationalisation. This is generally true and very often involves bigger efforts and of course resources. Those resources may be of administrative, legal, technological nature as well as of course marketing efforts which need to be adapted to the different tastes. The latter often involves adapting the technical features of the product or services.

Thinking of going international, you should not underestimate the language issue as you would like your users to understand you “naturally”.

Making The Case For An Overseeable Market

You may be excused to think what all this has to do with a country of a small geographical size. I can reassure you that it has a big influence.

Let us consider for a moment a venture which is going to be live either beta or commercially. So you have done your homework and everything is fine with all the checkboxes ticked.

You are aware that you have to go global or at least approach different geographic markets very soon. So you have computed it into your business plan. As you may be aware, time to market is crucial and your cash flow is depending on it.

In order to prepare all this in an adequate and efficient timeframe you may consider an overseeable market which englobes a lot of the needs and requests of the bigger markets you are envisaging. Such a market should enable you not only to test as well as adapt your marketing and user interfaces from a linguistic point of view but also from a social and cultural aspect.

Furthermore, such a launch market should englobe different technologies and different jurisdictions, as you have to adapt and comply your commercial and legal documentation to those bigger markets.

The Whole World On A Plate

Luxembourg can provide you with all this as a country and market. Every single day there are more than 150.000 commuters entering Luxembourg, not only from one country or cultural background but three: Belgium, France and Germany. Furthermore, there are over 150 different nationalities residing in Luxembourg and of course living in harmony with their cultural background.

On the other hand, as the size of the country is relatively small the interactions with its neighbours Belgium, France and Germany are intense – be it on the administrative or technical side.

Another factor which should be remembered is that Luxembourg is a founding and active member of the European Union and thus well respected. Even if you launch your venture in a bigger country and would then like to approach other markets, you may be stigmatised as a competitor early on. Whereas when you approach other markets out of Luxembourg, you may have the benefit of a small multicultural country and stay below the radar of your peers a bit longer.

Making The Case For A Small-Sized Well Surrounded Market

These and many other aspects are in favour of launching your venture first in a small country and then deploying it to your targeted growth markets as your learning curve may be smoother and shorter.

Many successful international companies have benefitted from these advantages e.g. in the broadcasting, audiovisual,  financial or telecommunication industry.

They have all benefitted from a diversity of nationalities with their specific cultures and languages in one place. What is more, they could test their technology or services in live situations as if they were addressing several geographic markets. Not only on the operational side but also on the legal and compliance side. Finally they have grown into “neutral” international players stemming from a small and politically stable country.



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