If you are scaling into new geographies, I wrote this for you.
When managing a startup across multiple geographies, you may wonder how to best:
- Align on vision
- Allocate resources
- Communicate progress
At SpotHero, a consumer marketplace for parking, we had this problem. We first launched in Chicago. We knew we had to expand to new cities, but the odds were against us.
Several competitors were already national. They had been around longer. They had launched in new cities first. They had raised more money. Not to mention several other existential threats we faced. Many folks thought we were doomed before we ever got started.
But, we prevailed.
To solve out geographic scaling objectives, we built a plan. We called our plan the “National Domination Plan.”
The National Domination Plan was one slide. Its power was in its simplicity.
The National Domination Plan had a few key elements:
- Tier of Market
- Goal by Tier
- Geographies by Tier
- Defining KPIs
- Resource commitments by team (e.g. Sales Staffing, Marketing Budget)
- Specific strategies or tactics for each tier of market
The National Domination Plan can look something like this:
Having a National Domination Plan is important for a few reason:
- Allows you to both operate new markets and others at scale.
- Reminder that your goals may differ by stage (e.g. “soft launch” vs “scale”)
- Enables you to set expectations for KPIs to balance new vs existing markets
- Specifies on resource commitments by team to minimize bottlenecks
- Clarifies to everyone what you will and won’t do.
- Communicates why some markets are performing better than others
Here’s what it might look like as you start to fill it out:
Using the National Domination Plan, a voice over might sounds something like this:
“We tier our markets from 1 to 4, each with a unique goal. For Tier 2 markets, our goal is to optimize from a launch market where we test to a market with profitable unit economics. Texas is the main geo in Tier 2. We’re improving LTV/CAC from <1 to the 1 to 2 range. In order to get there, we need sales to hire an account manager to optimize our existing merchant relationships. We will also double advertising. We’ll do this by launching our search engine marketing ads on Google. Once we hit an LTV/CAC of 2, we’ll move Texas to a Tier 3 market to focus on scaling volume with more sales and marketing resources.”
A few years after implementing our National Domination Plan framework, we:
- Scaled to 300+ cities
- Emerged as the market leader
- Acquired multiple competing companies
- Gained the biggest marketshare across every city
- Earned recognition as one of the biggest consumer marketplaces in North America
The plan worked. This framework can be applied to almost any business trying to scale by region. If you are running that type of business, you are welcome to repurpose my National Domination Plan for your own startup. Would just love to hear from you if you do!