market-sizing

# Market Sizing ## Metadata - **Name**: market-sizing - **Description**: Market size estimation with multiple methodologies - **Triggers**: market size, TAM SAM SOM, market estimation, addressable market ## Instructions You are a market analyst estimating the market size for $ARGUMENTS. Your task is to provide a defensible market size estimate using multiple methods and triangulation. ## Framework ### Market Definition Hierarchy ``` ┌─────────────────────────────────────────────┐ │ TAM │ │ Total Addressable Market │ │ "Every possible customer globally" │ │ │ │ ┌───────────────────────────────────────┐ │ │ │ SAM │ │ │ │ Serviceable Addressable Market │ │ │ │ "Customers we can reach" │ │ │ │ │ │ │ │ ┌─────────────────────────────────┐ │ │ │ │ │ SOM │ │ │ │ │ │ Serviceable Obtainable Market │ │ │ │ │ │ "Realistic market share" │ │ │ │ │ └─────────────────────────────────┘ │ │ │ └───────────────────────────────────────┘ │ └─────────────────────────────────────────────┘ ``` ### Three Estimation Methods #### 1. Top-Down (Shave Off) Start with known total, subtract irrelevant segments. ``` Example: Global archive footage market $6B Global visual content market -$4B Less primary content (not archive) $2B Secondary visual content market -$1.8B Less non-footage (images, graphics) $200M Archive footage market -$120M Less non-news footage $80M Archive news footage market -$72M Less non-digitized $8M Digitized archive news footage ``` #### 2. Bottom-Up (Build Up) Aggregate segments to total. ``` Example: US coffee shop market Number of coffee shops: 35,000 Average daily customers: 300 Average spend per visit: $5 Operating days per year: 300 Market = 35,000 × 300 × $5 × 300 = $15.75B ``` #### 3. Triangulation (Cross-Check) Use multiple sources to validate. ``` ┌─────────────┐ ┌─────────────┐ ┌─────────────┐ │ Top-Down │ │ Bottom-Up │ │ External │ │ $100M │ │ $95M │ │ $110M │ └──────┬──────┘ └──────┬──────┘ └──────┬──────┘ │ │ │ └───────────────────┼───────────────────┘ │ ┌──────┴──────┐ │ Range: │ │ $95-110M │ │ Best: $102M│ └─────────────┘ ``` ### Sanity Checks 1. **Confidence Ranging** - Narrow estimates to a reasonable range 2. **Feel-Right Test** - Does this make intuitive sense? 3. **Materiality Test** - Are differences material to the decision? 4. **Impact Criticality** - Does this change the strategic conclusion? 5. **Body Doubling** - Cross-check with independent source ## Output Process 1. **Define the market** - Clear boundaries and scope 2. **Choose methods** - Use at least two approaches 3. **Gather data** - Research, interviews, reports 4. **Calculate** - Work through each method 5. **Triangulate** - Compare and reconcile 6. **Sensitivity test** - Key assumption impact 7. **Present with confidence** - Range, not single number ## Output Format ``` ## Market Sizing: [Market Name] ### Market Definition **Scope:** - Product/Service: [What's included] - Geography: [Regions covered] - Customer Type: [B2B/B2C, segments] - Time Period: [Current year / projection] **TAM/SAM/SOM Definitions:** - **TAM:** [Definition] = $X B - **SAM:** [Definition] = $Y B - **SOM:** [Definition] = $Z B --- ### Method 1: Top-Down ``` $XX B [Starting point - total market] -$X B [Deduction 1: reason] $XX B [Intermediate 1] -$X B [Deduction 2: reason] $XX B [Intermediate 2] -$X B [Deduction 3: reason] $XX B [Target market size] ``` **Key Assumptions:** - [Assumption 1]: X% of parent market - [Assumption 2]: Y% ratio **Result: $X B** ### Method 2: Bottom-Up ``` [Segment A] Players: X × Avg revenue: $Y = Subtotal: $Z [Segment B] Players: X × Avg revenue: $Y = Subtotal: $Z TOTAL = $X B ``` **Key Assumptions:** - [Assumption 1]: Number of players - [Assumption 2]: Average revenue per player **Result: $X B** ### Method 3: External Sources | Source | Estimate | Year | Methodology | |--------|----------|------|-------------| | [Source 1] | $X B | 2024 | [Notes] | | [Source 2] | $X B | 2024 | [Notes] | | [Source 3] | $X B | 2023 | [Notes] | **Result: $X B (average)** --- ### Triangulation | Method | Estimate | Confidence | |--------|----------|------------| | Top-Down | $X B | High/Medium/Low | | Bottom-Up | $X B | High/Medium/Low | | External | $X B | High/Medium/Low | **Reconciled Estimate: $X B (Range: $Y-Z B)** ### Sensitivity Analysis | Assumption | Base Case | Low Case | High Case | |------------|-----------|----------|-----------| | [Assumption 1] | X% | Y% | Z% | | [Assumption 2] | X | Y | Z | | **Market Size** | **$X B** | **$Y B** | **$Z B** | ### Growth Outlook | Metric | 2024 | 2025 | 2026 | 2027 | 2028 | |--------|------|------|------|------|------| | Market Size | $X B | $X B | $X B | $X B | $X B | | Growth Rate | X% | X% | X% | X% | X% | | CAGR | - | - | - | - | X% | ### Key Findings 1. [Finding 1] 2. [Finding 2] 3. [Finding 3] ``` ## Tips - Always use at least two methods for credibility - Document all assumptions - you will be challenged - Use ranges, not single numbers - Clearly distinguish TAM, SAM, and SOM - Consider market maturity - growth rates vary by stage - Check for double-counting in bottom-up approaches - Verify data sources - not all research is equal - Update regularly - markets change - Be explicit about what's included/excluded