When startups prepare to enter international markets, they often focus only on product-market fit and available budget. Yet each region brings unique legal, economic, and social dynamics that can either obstruct or accelerate expansion. Miraziz Khidoyatov, a corporate lawyer specializing in cross-border regulations, has developed a proprietary framework — COMPASS — designed to quantify market-entry risks and shape data-driven expansion strategies. In this interview, he explains how COMPASS works and how startups can use it to make more informed decisions about global growth.
Miraziz, what are the most common mistakes startups make when entering new markets, and what do you see as the biggest challenge in planning expansion?
One recurring mistake I see is the belief that a startup must achieve significant traction in its domestic market before going international. In many cases, launching abroad — especially in emerging markets — can provide the kind of commercial validation that’s essential for future fundraising rounds.
Another issue is evaluating readiness for expansion based solely on internal growth metrics. Internal maturity is important, sure, but startups must also assess how well their business model fits into the external environment of a new market. Even a stable and well-funded company can fail abroad if it lacks institutional resilience, structural adaptability, and strategic (including cultural) alignment with the target country.
To address this, I developed the COMPASS framework. It helps startups assess both the potential of a new market and how well that market aligns with their model. The idea is to give founders a quantitative understanding of their chances before taking the leap.
How does the COMPASS framework work, and which of these challenges does it help solve?
COMPASS is based on three core algorithms:
- GIRA evaluates country stability across political, economic, and social factors.
- EPI assesses the market’s long-term growth potential.
- SIAS measures strategic and cultural compatibility between the business model and the market.
This kind of evaluation is especially critical in fast-moving sectors like tech or energy, where choosing the wrong market can cost not just investment, but growth opportunities themselves.
What sets COMPASS apart is its reliance on measurable data tailored to a specific business, rather than subjective assumptions or anecdotes from other companies. This helps founders better assess risk and make sound strategic decisions.
How do traditional market evaluation models fall short for today’s startups?
Classic frameworks like the OLI paradigm or the Uppsala model were developed decades ago, in a world with more stable risks, more reliable institutions, and slower rates of technological change. While they offer partial insights into expansion, they don’t quantitatively assess market instability, structural growth drivers, or compatibility with a startup’s model.
These models are too abstract and static for today’s world. They don’t help startups gauge key environmental factors, forecast development scenarios, or simulate how a business might evolve in a given ecosystem. COMPASS fills these gaps by offering tools to evaluate volatility, predict structural dynamics, and test how well a target country’s conditions align with the company’s goals.
How adaptable is COMPASS for different types of companies — early-stage startups vs. mature firms? Is any special training needed to use it?
COMPASS has a fixed architecture, meaning the weights for GIRA, EPI, and SIAS are standardized to ensure consistency and comparability across companies. However, each business can customize the internal metrics it uses under the SIAS parameter — this could include access to resources, IP protection, or institutional predictability.
This flexibility is especially useful for startups. SIAS can help identify jurisdictions where synergy with the market is high, without requiring massive resource commitments. Mature companies, on the other hand, can use SIAS to identify regions where their model can scale smoothly without institutional or cultural friction.
No special training is required to use COMPASS. Before applying the framework, a company simply needs to define its strategic priorities and be prepared to match those against external market characteristics. It’s not a replacement for a full expansion strategy, but it enables founders to build that strategy on objective market data rather than instinct or past experience.
It also saves startups resources during the research phase — something especially valuable for younger companies. And it provides clear benchmarks for consultants and legal advisors assisting with market entry.
Central Asia — and Uzbekistan in particular — is often mentioned as a promising but under-digitized region. How can COMPASS help startups evaluate whether to scale in such markets?
COMPASS is designed to help identify not just developed but also developing markets where structural conditions could allow a startup to grow exponentially — Central Asia being a great example.
Yes, Uzbekistan’s digital infrastructure may lag behind that of developed countries, but this isn’t a weakness — it’s an opportunity. In mature markets, competition is saturated and requires substantial investment — financial, technological, and creative — to break through. In emerging markets, however, unmet demand is often much more visible.
That’s why EPI accounts for the level of market development when calculating potential. COMPASS helps highlight markets where the supply-demand gap is large, providing fertile ground for expansion.
Take Uzbekistan: GIRA shows a moderate level of institutional risk (48.4/100), but EPI reflects near-maximum growth potential (~98.26/100). COMPASS enables startups to fine-tune their expansion strategies, simulate best- and worst-case scenarios, and determine whether entry remains viable under shifting conditions.
The framework draws from globally recognized indexes and international data sources, making it trustworthy and actionable. After applying COMPASS, companies walk away not just with a risk score, but with a clear roadmap for controlled, market-sensitive entry.
You’ve worked on major cross-border transactions. What experience most shaped your understanding of how international markets truly operate?
My understanding of global markets has evolved throughout my career, shaped by complex projects and strategic advisory work. I realized early on that international expansion is not just about capital or having a great product — it’s about systematically understanding the environment you’re entering.
For example, when I supported the Ifoda Agro project in Uzbekistan, I witnessed how deeply cultural nuances influenced the deal. Building bridges between stakeholders was critical to our success. That experience taught me that cultural intelligence not only speeds up negotiations but also builds lasting trust. It was then that I crystallized a key principle: global expansion requires not just legal and financial planning, but institutional and cultural fluency.
In my work with multinational clients, I’ve seen that expansion into emerging markets is often delayed, not due to lack of resources or external barriers, but because of internal cognitive biases. Take Uzbekistan: many firms viewed it as just another post-Soviet country in the CIS, rather than as a distinct market with its own regulatory and economic logic. These perception errors often cost companies years of missed opportunities.
When I consulted for the Latvian firm Olymps Ltd., I saw the opposite: the company embraced local market nuances and adapted its strategy accordingly. This proved that international success often hinges more on adaptability than budget.
Back in college, I met a founder of Southwest Airlines, who shared how corporations used lobbying to block competitors, even in the U.S. domestic market. Later, I saw the same pattern with Uber: scaling in mature markets often requires immense resources to overcome institutional resistance. That’s when I started thinking: instead of fighting uphill battles in saturated markets, why not target those with strong demand and fewer barriers?
I’ve also worked closely with private equity and venture capital firms, and I’ve seen how poor assessment of external conditions can undermine an entire investment thesis. Startups often underestimate the complexity of market entry or overestimate their ability to adapt, only to fail.
All these fragments formed a bigger picture: global expansion is not a leap of faith — it’s an engineering challenge. It requires a risk map, structural forecasts, and a real understanding of how well your business model fits the target environment. That’s the mindset I embedded into COMPASS.
Looking ahead, how do you see COMPASS being used in the context of the energy transition and global uncertainty? Which regions stand out right now according to your model?
Success today isn’t just about having the right tech — it’s about knowing where and how to deploy it. In the energy sector, for instance, institutional stability (GIRA), actual market demand and growth drivers (EPI), and alignment with market norms (SIAS) are all critical.
Uzbekistan is one compelling case. The country faces chronic energy shortages. According to the World Bank and the UN Energy Agency, the supply-demand gap has prompted the government to attract global investors to build new plants and upgrade infrastructure. I’ve personally worked on large-scale energy projects there, including with major players like ACWA Power and Masdar.
Energy companies can use COMPASS to evaluate Uzbekistan: its institutional stability is moderate (GIRA ~48.4/100), but its growth potential is very high, making it a strong candidate for long-term positioning.
Another example is Germany. After phasing out nuclear energy and cutting off cheap Russian gas, the country faced an energy shortfall. This spurred new investments in renewables, hydrogen, and grid modernization. Despite its market maturity, these shifts create opportunities, especially for startups that can integrate into emerging energy ecosystems.
COMPASS helps identify where such integration is supported by market demand and institutional frameworks so that founders can make informed, strategic bets instead of relying on gut instinct.
