The Secrets of Market Sizing

Market sizing is a staple of consulting engagements, strategy development, investor pitches, and case interviews (e.g., classics like “how big is the market for golf balls in Japan?”).  Oddly enough, there’s very little publicly-available information on how to go about it.  Maybe that’s how consultants maintain demand for their services, or maybe it’s because no one wants you to know how shaky even the most frequently cited market size estimates can be.

Like forecasts, market size estimates should most often be considered directional (consulting speak for “in the right ballpark”).  You should also keep this point in mind when consuming market size information – the market size numbers you read in the news or market research reports are probably only accurate within 10-20% in many cases.  One of the best ways to ensure that you get at least a sensible result is to triangulate between different approaches: top-down and bottom-up estimates. Continue reading The Secrets of Market Sizing