Entering new, often foreign, markets is crucial for startup scaling. But it is not clear which initial users help startups learn about demand in these markets. While local users can offer clearer signals, foreign ones can offer more transferable ones. This begs the question: How does the local vs. foreign composition of initial users shape startups' subsequent foreign user growth? I test this question on a digital product platform. Taking advantage of variation in feature timing, I find that startups with a higher share of local initial users get more foreign user growth after they feature on the platform. This effect magnifies among startups in more familiar and representative local contexts, making signals clearer and more transferable. A supplementary experiment directly eliciting human and AI product feedback and iteration triangulates these findings. Together, these results underscore the importance of initial users who offer clear and transferable signals, with implications for entrepreneurial experimentation and strategy.
