Introduction
The trade-off we're examining today is whether Kiavi's rental loan program should focus on expanding to new markets or deepening penetration in existing strong markets. This decision is crucial for Kiavi's growth strategy and resource allocation. I'll analyze this trade-off by considering market dynamics, operational capabilities, and potential impacts on Kiavi's business model.
I'll start by asking clarifying questions, then identify the trade-off type, understand the product, form a hypothesis, define key metrics, design an experiment, plan data analysis, create a decision framework, and finally provide a recommendation with next steps.
Step 1
Clarifying Questions (3 minutes)
Why it matters: Helps determine growth potential in existing markets Expected answer: 20-30% market share in top markets Impact on approach: Lower penetration would favor deepening existing markets
Why it matters: Influences risk assessment of expansion strategy Expected answer: $2-3 million upfront, 18-24 months to profitability Impact on approach: Higher costs/longer timeline would favor existing markets
Why it matters: Affects efficiency of growth strategies Expected answer: CAC 30-40% higher in new markets initially Impact on approach: Significantly higher CAC in new markets would favor existing markets
Why it matters: Determines feasibility of deepening market strategy Expected answer: Current systems can handle 2-3x volume increase Impact on approach: Limited scalability would favor new market expansion
Why it matters: Aligns strategy with broader business goals Expected answer: 50% revenue growth within 2 years Impact on approach: Aggressive targets might necessitate both strategies
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