# Market expansion: another city or another kind of shop? > A module case on market expansion: compare a new city with the same product and a new kind of customer at home on the same numbers, place both in the Ansoff matrix, and choose one. - Course: [From Idea to Profitable Product: Building Without Investors](https://productovi.com/courses/bootstrapped-product.md) - Module: Is the market big enough? - Lesson 19/30, ~36 min - Source: https://productovi.com/courses/bootstrapped-product/another-city-or-another-kind-of-shop ## Market expansion: two ways out of one city **Alex Tutor:** Vinnytsia alone gives GarageDesk about 47 shops, and the founders want your advice and mine on market expansion: where to grow next. There are two ideas on the table. **Oscar:** Khmelnytskyi: 120 kilometers away, about 150 fitting shops by the same count, and the same parts distributors deliver there. **Nina:** Or tire shops right here in Vinnytsia. About 230 of them, and no travel. **Sofia:** 230 is more than 150. Isn't that the answer? **Alex Tutor:** The count is only the first factor. Look at what each shop would pay, what share you can win, and what the product has to become. ![A road splits: one way runs to a distant town of familiar small garages, the other to a nearby row of shops with stacked tyres outside.](https://productovi.com/courses/bootstrapped-product/inline/another-city-or-another-kind-of-shop-illustration-2.webp) ## Tire shops **Nina:** Tire shops see their customers twice a year, in spring and autumn. So two reminders a year. Oscar asked around: they would pay about 300 a month, not 600. **Alex Tutor:** And Khmelnytskyi pays the same 600 as Vinnytsia: 150 × 600 = 90,000 a month at the ceiling. Now the tire shops. > **Exercise:** Vinnytsia has about 230 tire shops that could use GarageDesk at about 300 UAH a month. What is their monthly revenue ceiling in UAH? ## Same product, new place: geographic expansion **Alex Tutor:** Khmelnytskyi needs no new product: the same niche sentence, the same price, the same reminders. The work is reaching owners who have never heard of you. **Oscar:** The parts counters there belong to the same distributors. And Dennis has a cousin with a shop in Khmelnytskyi. **Alex Tutor:** That's the niche talking to itself across cities. A new kind of shop starts from zero: new words, new problems, new places where they meet. ![Two towns joined by a highway with parts-delivery vans travelling both ways; two mechanics wave to each other from their garages at each end.](https://productovi.com/courses/bootstrapped-product/inline/another-city-or-another-kind-of-shop-illustration-3.webp) **Nina:** True. Tire shops buy from tire wholesalers. They never come to our parts counters. **Sofia:** And would Khmelnytskyi be enough for the goal? **Alex Tutor:** Start with Khmelnytskyi on its own, at the same one-in-four share. > **Exercise:** Khmelnytskyi has about 150 fitting shops at 600 UAH a month. If GarageDesk wins one in four of them, what monthly revenue does Khmelnytskyi add, in UAH? > **Exercise:** Vinnytsia has 190 fitting shops and Khmelnytskyi about 150. If GarageDesk wins one in four fitting shops in both cities, how many paying shops is that? ## What the product would become **Alex Tutor:** Now list what Nina would have to build for tire shops. **Nina:** Seasonal reminders instead of mileage. A second, cheaper plan. And in the peak weeks they work with a live queue, so "come back for your service" means something else. **Alex Tutor:** Every item is time taken from the 22 shops that pay now. And the tire shops still wouldn't close the gap. **Oscar:** Khmelnytskyi costs my Saturdays and some fuel, not a second product. ![Khmelnytskyi reuses the same reminders, price and parts counters; tire shops need seasonal reminders, a cheaper plan and new channels, and take time from paying shops.](https://productovi.com/courses/bootstrapped-product/diagrams/m5-l3-new-place-or-new-kind.png) *A new place reuses the product; a new kind of customer starts from zero.* > **Exercise:** GarageDesk sends repair shops reminders by date and mileage at 600 UAH a month, and it's known at the parts counters in Vinnytsia. Tire shops there see customers only twice a year, in spring and autumn, say they'd pay about 300 UAH a month, work with a live queue in peak weeks and buy from tire wholesalers. What would GarageDesk need to add or change to serve tire shops? Choose all that apply. ## Where both ideas sit in the Ansoff matrix **Alex Tutor:** Both ideas are **market expansion**: growing past the customers you have. The **Ansoff matrix** sorts ways to grow by two questions: is the product existing or new, and is the market existing or new? **Sofia:** So Khmelnytskyi is the same product in a new market? **Alex Tutor:** Yes: **market development**, here a geographic expansion. Same reminders, same 600, a ceiling of 150 × 600 = 90,000 a month. Tire shops are a new market that also needs a reworked product, which drifts toward the riskiest corner, **diversification**, for a ceiling of 69,000. **Nina:** So the matrix says what we found by counting: the less you change at once, the less can go wrong. **Alex Tutor:** Place Khmelnytskyi in the matrix yourself. > **Exercise:** Where does "the same GarageDesk, at the same price, for repair shops in Khmelnytskyi" sit in the Ansoff matrix? ## Market expansion strategy: how to enter a new city **Oscar:** I can't knock on 150 doors. I'm still at my job. **Alex Tutor:** Go where they already gather: the distributors' counters, the Khmelnytskyi mechanics' group, Dennis's cousin. One local shop that brings cars back is worth more than any ad. **Alex Tutor:** Oscar has a small budget and few hours. Two ways to spend them. > **Exercise:** All of GarageDesk's paying repair shops are in Vinnytsia. Khmelnytskyi, 120 km away, has about 150 fitting shops that buy from the same parts distributors, and one customer, Dennis, has a cousin who runs a shop there. Oscar has a small budget and about 12 hours a week. How should GarageDesk start in Khmelnytskyi? **Oscar:** I found that group. Same rule as ours: no ads. **Alex Tutor:** Then write something useful: what happened in Vinnytsia, with numbers, and an offer to show it to anyone who asks. > **Exercise:** **True or false:** tire shops are the better direction because Vinnytsia has more of them (about 230) than Khmelnytskyi has fitting shops (about 150). **Sofia:** Can I draft that post for the Khmelnytskyi group? **Oscar:** Please. Short, no sales talk, and real numbers from Vinnytsia. **Nina:** And don't promise things we don't do, like booking. **Alex Tutor:** Write it as a mechanic would want to read it on a phone between two cars. > **Exercise:** GarageDesk sends service reminders to car owners under each repair shop's name; 22 shops in Vinnytsia pay 600 UAH a month for it. It doesn't do online booking. The Khmelnytskyi mechanics' Telegram group bans ads. Write a 3–5 sentence post for that group that introduces GarageDesk without reading like an ad. ## The decision **Alex Tutor:** Now decide, as if you were in their place. Use the whole module: the niche, the count, the share and where owners gather. **Nina:** Remember my June checkpoint too. The rule was written in advance. **Oscar:** And my time: about 12 hours a week until I hit 30 paying shops. **Alex Tutor:** One more check before you write your recommendation. > **Exercise:** **True or false:** if the estimates clearly favour growing into Khmelnytskyi (about 150 fitting shops, one in four realistic, Oscar's 12 hours a week), the founders don't need to set a signal for revisiting the decision. **Sofia:** Numbers first, then the choice. > **Exercise:** Choose where GarageDesk grows next and justify the choice. **Oscar:** We chose Khmelnytskyi, from July. Tire shops stay on the "later" list. **Nina:** And my checkpoint said continue: shops grew every month, and six and a half months of runway are left with the reserve untouched. > **Key ideas** > > - Compare growth directions on the same numbers: count × price = ceiling, then a realistic share, then the goal. > - Khmelnytskyi: 150 × 600 = 90,000 at the ceiling; with Vinnytsia, (190 + 150) × 25% = **85 shops** ≥ 84. Tire shops: 230 × 300 = 69,000; with Vinnytsia about 45,750 UAH a month, below 50,000. > - A **new place** with the same niche reuses the product, the price and the channels; a **new kind of customer** needs new product logic, a new price, new words and new places. > - In the **Ansoff matrix**, a new city is **market development** (same product, new market); a new kind of shop also changes the product and drifts toward **diversification**, the riskiest corner. > - Enter a new place where the niche already gathers: the same suppliers, local groups, introductions from existing customers. > - Decide with the checkpoint written in advance, and name the signal that would make you revisit. **Alex Tutor:** Next module: GarageDesk grows past 30 shops. Which numbers do the founders check every month? - Previous lesson: [The market, bottom up: a market size example](https://productovi.com/courses/bootstrapped-product/the-market-bottom-up.md) - Next lesson: [MRR calculation and monthly churn](https://productovi.com/courses/bootstrapped-product/mrr-and-churn.md) --- Productovi Learning. Free, no sign-up needed to read.