83 - Local Market Fit is Key in Emerging Market Investments
Investing in emerging markets requires more than copying Western business models. Success depends on local market fit—solving real problems with tailored solutions. Learn how top investors identify businesses that truly scale.
Local Market Fit is Key in Emerging Market Investments
Emerging markets are full of opportunities, but investing in the wrong business model can be a costly mistake. A startup that thrives in Silicon Valley may struggle in Lagos or Jakarta if it doesn’t account for local realities.
The Danger of Imported Ideas
Investors often make the mistake of backing companies that copy Western business models without adaptation. What works in developed markets may not work where:
• Consumer behavior is different – Payment preferences, trust levels, and purchasing power vary widely.
• Infrastructure is limited – Logistics, supply chains, and connectivity often require custom solutions.
• Regulations are unique – Local governments may have vastly different policies compared to Western markets.
What Smart Investors Look For
The best investment opportunities solve real, local problems using market-specific solutions. Some standout examples include:
• FinTech built around mobile money – In regions where traditional banking is weak, mobile payments thrive.
• Logistics tailored to infrastructure – Companies optimizing delivery networks for unreliable roads and supply chains.
• Affordable healthcare innovations – Solutions designed to work in markets with limited medical access.
Final Thought
The key question for investors: Is this a real business solving an actual problem, or just an imported idea? If a company isn’t designed for the local market, it won’t scale.
Listen to this episode of Pattern Cognition to learn how to identify businesses with true local market fit.
Highlights:
00:00 Introduction to Due Diligence in Emerging Markets
00:05 Assessing Local Market Fit
00:17 Importance of Local Adaptation
00:24 Identifying Scalable Opportunities
Links:
Website: https://www.sidmofya.com/
LinkedIn: https://www.linkedin.com/in/sidmofya/
Transcript:
Five key due diligence checks for investing in emerging markets. Number three, local market fit. Is this a real business or just an I imported idea? Just because an idea works in Silicon Valley doesn't mean it'll work in Lagos or Jakarta or Lusaka. Investors often make the mistake of backing companies that copy Western models without local adaptation.
The best opportunities solve actual emerging market specific problems, whether it's FinTech built around mobile money or logistics optimized for poor infrastructure. If the business doesn't fit the local reality, it just won't scale.