{"id":548,"date":"2026-09-15T11:10:03","date_gmt":"2026-09-15T11:10:03","guid":{"rendered":"https:\/\/lsadvisory.co.uk\/?p=548"},"modified":"2026-09-15T11:13:31","modified_gmt":"2026-09-15T11:13:31","slug":"most-market-entries-dont-fail-they-stop","status":"publish","type":"post","link":"https:\/\/lsadvisory.co.uk\/?p=548","title":{"rendered":"Most market entries dont fail. They stop."},"content":{"rendered":"\n


Market entry gets talked about as a bet. It pays off or it blows up, and everyone knows which by the end of it. The trade data describes something much duller, and much more common.

Economists have spent four decades measuring how long new trade flows actually last, and the findings are consistent across countries and across time. Studying US imports, Besede\u0161 and Prusa found the median duration of a new product-market flow to be strikingly short, with more than half observed for only a single year. Hess and Persson, looking at EU imports from 140 countries between 1962 and 2006, found a median duration of one year: almost 60% of flows ceased inside the first year, and fewer than one in ten survived a decade. Nitsch found the same shape in German import trade, where most relationships ran for one to three years.

These figures describe trade flows rather than companies, and a flow ending is not automatically a failure. But the pattern is unmistakable, and it is not what most boards picture when they approve an expansion. Entries rarely collapse. They begin, run quietly for a year or two, and then stop.

The risk is front loaded<\/strong>

There is a second finding in the same literature that matters more than the first. Trade flows show negative duration dependence: once a flow has survived its first few years, the chance of it ending falls sharply. Entry is not uniformly risky. It is dangerous at the start and comparatively safe afterwards.

That changes what the risk actually is. The exposure is not spread evenly over a decade. It sits in the twelve to twenty-four months immediately after the money has been committed and before the evidence has arrived.

The only reversible spend<\/strong>

Set the cost of proving a market against the cost of entering one. Certification, tooling, stock, a distributor agreement, a first hire in-country, a trade stand, a year of a senior person’s attention. Those are committed costs. Once made they are difficult to unwind, and politically harder still.

The evidence that decides whether to make them is a fraction of the sum. It is also the only money in the whole programme that is still reversible.

Most entry decisions rest on a single source. A bought market report. A distributor’s enthusiasm. A spreadsheet built backwards from a number someone has already promised. Each is a legitimate input. None of them is a test. A report describes a market that already exists; it cannot tell you whether anyone in it will change supplier for you. A distributor is describing an opportunity they would like you to fund. A target is an intention wearing a number.

A route to market is not evidence of demand.

Seven assumptions worth testing first<\/strong>

Every entry decision rests on assumptions drawn from three directions: what the business needs commercially, what buyers will actually do, and what the market structure allows. Build the answer three ways and reconcile them. Where the three disagree, that disagreement is usually the finding that saves the money.

What the business needs<\/strong>

1. The price floor survives the journey. Landed cost, duties, certification, currency and channel margin all sit between your works price and the buyer. The home-market margin rarely arrives intact.
2. The commercial model travels. If sales today are founder-led or relationship-led, ask honestly what replaces the founder four thousand miles away.

What buyers will actually do<\/strong>

3. The ideal customer exists there, in the same form and in enough numbers. Not a similar-sounding job title inside a differently shaped industry.
4. Something would actually make them switch. Interest is not a trigger. Someone has to own the disruption, and the risk, of replacing a supplier that currently works.
5. They will pay it, and you know who signs. Willingness to pay is tested, not converted from a domestic price list. Buyer, user, specifier and procurement rarely want the same thing.

What the market structure allows<\/strong>

6. The channel margin is affordable. Distributors and partners take a structural cut, and the model has to fund it before the first unit ships.
7. The route in is genuinely open. Tariffs, standards, certification and incumbent positions decide how much of the market is addressable, which is never the same as its total size.

The question that decides the rest<\/strong>

All seven are researchable. The one that determines whether the research is worth anything is not.

Before any evidence is gathered, write down the revenue, the margin, the payback period and the timeframe that would make this a go, and therefore what a no looks like. Thresholds set afterwards drift toward whatever the evidence happened to find. Thresholds set beforehand hold, including on the day everyone would rather they didn’t.

That is the difference between research that informs a decision and research that ratifies one already taken. It costs nothing, and it takes about ninety minutes.



Sources: Besede\u0161 & Prusa, *On the Duration of Trade* (NBER Working Paper 9936, 2003) and *Product Differentiation and Duration of US Import Trade* (Journal of International Economics, 2006); Hess & Persson, *Exploring the Duration of EU Imports* (Review of World Economics, 2011); Nitsch, *Die Another Day: Duration in German Import Trade* (Review of World Economics, 2009).
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Market entry gets talked about as a bet. It pays off or it blows up, and everyone knows which by the end of it. The trade data describes something much duller, and much more common. Economists have spent four decades measuring how long new trade flows actually last, and the findings are consistent across countries […]<\/p>\n","protected":false},"author":1,"featured_media":551,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8],"tags":[],"class_list":["post-548","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-market-entry"],"blocksy_meta":{"styles_descriptor":{"styles":{"desktop":"","tablet":"","mobile":""},"google_fonts":[],"version":7}},"_links":{"self":[{"href":"https:\/\/lsadvisory.co.uk\/index.php?rest_route=\/wp\/v2\/posts\/548","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/lsadvisory.co.uk\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/lsadvisory.co.uk\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/lsadvisory.co.uk\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/lsadvisory.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=548"}],"version-history":[{"count":1,"href":"https:\/\/lsadvisory.co.uk\/index.php?rest_route=\/wp\/v2\/posts\/548\/revisions"}],"predecessor-version":[{"id":550,"href":"https:\/\/lsadvisory.co.uk\/index.php?rest_route=\/wp\/v2\/posts\/548\/revisions\/550"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/lsadvisory.co.uk\/index.php?rest_route=\/wp\/v2\/media\/551"}],"wp:attachment":[{"href":"https:\/\/lsadvisory.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=548"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/lsadvisory.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=548"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/lsadvisory.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=548"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}