How To Pick The Right Market
The speaker explains that market selection risk can be mitigated by running small ad tests across multiple markets before committing to a physical location. By spending $500–$1,000 in each of several markets, entrepreneurs can identify where lead costs are lowest before signing any lease.
Summary
In this brief clip, the speaker addresses the challenge of choosing the right market for a service-based business with a physical location. Rather than relying on gut instinct or assumption about which location might perform well, the speaker advocates for a data-driven testing approach before making any major commitment.
The core strategy proposed is to run paid advertising campaigns — spending roughly $500 to $1,000 — across five to ten different potential markets simultaneously. By measuring where the lowest lead costs are generated, the entrepreneur gets real market signal rather than speculation.
The speaker then addresses the obvious follow-up concern: what happens to people who opt in through the ads when there is no actual location yet? The answer is delivered humorously but practically — simply ignore the leads, which the speaker notes is what the vast majority of business owners do anyway. The point is that this approach allows entrepreneurs to gather genuine market data at a relatively low cost, while avoiding the massive downside risk of signing a multi-year commercial lease in a market that ultimately proves unresponsive.
Key Insights
- The speaker argues that market selection risk can be systematically reduced by running small paid ad tests across multiple markets rather than relying on intuition about which location to choose.
- The speaker recommends spending $500 to $1,000 per market across five to ten markets simultaneously to generate comparative lead cost data before making any location commitment.
- The speaker uses lowest lead cost as the primary metric for determining which market is worth entering, framing it as an empirical signal rather than a subjective judgment.
- The speaker dismisses concern about leads generated without a live location by noting that ignoring leads is standard behavior among the vast majority of business owners, normalizing it as a negligible ethical or practical issue.
- The speaker frames the entire strategy around avoiding the downside of signing a 5-year commercial lease in a market that was never validated, positioning ad spend as cheap insurance against that outcome.
Topics
Full transcript available for MurmurCast members
Sign Up to Access