By Shawn Xu, Former International Expansion, Square
Every company needs to think through market analysis differently, depending on the product or feature they are trying to launch. However, I tend to structure my approach by collecting data on market opportunity vs. market entry difficulty.
For the market opportunity considerations - you need to assess metrics such as total addressable market, customer lifetime value, unit economics, profitability potential, etc. You need to be able to accurately forecast these metrics going forward into future years, and take note of the growth trends. I tend to bake qualitative trends as well into my models - such as geopolitical considerations and cultural nuances.
On the market entry difficulty side of the equation, you need to weigh the amount of effort needed to win. Top of mind for me are competitive forces, customer acquisition costs, and regulatory barriers. You also need to be able to make an educated guess as to how these factors will evolve over time.
Through all of this, you have to keep in mind the reality of the company and product you are working with. You should think through whether you have any assets that make certain countries easier to launch in than others (e.g. employees with specific language skills). More importantly, you need to determine whether you have an existing product that directly addresses or solves the needs of the customer - and you need to be honest with yourself on whether or not you actually have an advantage over incumbents in the space. If not, you need to determine whether or not you have the appetite for investment and risk required to become successful, or at least reach parity with market leaders.
The markets with large opportunities and low entry difficulty are no brainers - these are the low hanging fruit you should act on right away as speed is crucial. You need to make a more data-driven judgement call on markets with both large opportunity and high entry difficulty.
I generally ignore the low opportunity markets, but revisit my analysis frequently to see if my assumptions on trends have changed. Last point of insight is this - the right markets sometimes require a greater amount of capital, people, and time than you have. This is okay to acknowledge. Sequencing and timing of country launches is just as important as picking a market. There's a lot that goes into those decisions as well.