ABOUT THIS COURSE
A few simple calculations that bring together basic market research and logical assumptions can give you a great sense of how big your potential market (customers and available revenue) might be.
Entrepreneurs use market sizing to understand whether a product or service is worth building. If the market is too small, it's likely not going to yield a profit in a reasonable timeframe.
In this 60 minute course, you'll:
- Define your market at three different "levels," from very broad to very narrow, so you can realistically estimate your likeliest customers and prioritize your resources
- Conduct preliminary research to make informed, educated assumptions about the amount of sales you might expect
- Perform simple calculations to your estimate your market potential and quickly determine if your solution is on track to be profitable (or if you need to make adjustments)
This course contains an interactive, downloadable PDF workbook:
Quantifying Market Size & Potential
You may complete this workbook in your browser window (just don't forget to save!) or download it to your computer.
The text in the blue boxes is editable and you should add your own thoughts or ideas about your solution in these areas as the workshop videos progress.
LESSON 1: Intro to TAM, SAM, and SOM
LESSON 2: CALculate your tam
Lesson 2 Workshop:
Update your worksheet by clicking in the blue areas and typing in a definition for your TAM (Total Available Market). Next, use secondary market research sources to outline a calculation. Show your math so you can remember your assumptions.
LESSON 3: calculate your sam
Lesson 3 Workshop:
Update your worksheet by clicking in the blue areas and typing in a definition for your SAM (Segmented Addressable Market). Next, use secondary market research sources to outline a calculation. Show your math so you can remember your assumptions.
LESSON 4: calculate your SOM (TARGET MARKET)
Lesson 4 Workshop:
Update your worksheet by clicking in the blue areas and typing in a definition for your SOM (Serviceable Obtainable Market) or Target Market. Next, use secondary market research sources to outline a calculation. Show your math so you can remember your assumptions.
LESSON 5: TIPs & tricks for market sizing
USING YOUR NEW LEARNINGS
Defining the way you will segment your market (from broad to narrow and specific) and assigning basic assumptions and simple calculations can provide rich insights to your solution's future potential. These estimates are helpful for both you and anyone who might invest in or support your work!
Try to incorporate these new learnings into your work by:
- Using market sizing early in your product development process to weed out ideas that may have a limitingly small market and prioritize ideas that have a great potential for future revenue
- Presenting an arguement for support to internal or external investors by demonstrating the possibilities for growth
- Getting tactical and specific about who your likely "early adopters," or first customers will be (SOM), and how you might reach them
- Understanding which customers you should prioritize for customer interviews and empathy mapping (hint: Check out this course to learn more about understanding your customers!)