marketsize - carnegie mellon university · marketsize •...
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![Page 1: MarketSize - Carnegie Mellon University · MarketSize • Quan&fies!the!financial!poten&al!of!your!business!! • Helps!you!refine!Business!Model!Canvas!hypotheses:! • Very!small!marketsize!may!notbe](https://reader034.vdocuments.site/reader034/viewer/2022042315/5f0399c57e708231d409dad7/html5/thumbnails/1.jpg)
Market Size
Introduc)on * Defini)ons * Common Mistakes * Applica)on
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Market Size
• Quan&fies the financial poten&al of your business • Helps you refine Business Model Canvas hypotheses:
• Very small market size may not be worth pursuing • May be difficult to gain trac&on in a gigan&c market
• Two measurements: • Money (USD, $$$) • Units
• People • Consump&on (e.g. page views, kilowaM hours, room nights, ect)
Defini)on
![Page 3: MarketSize - Carnegie Mellon University · MarketSize • Quan&fies!the!financial!poten&al!of!your!business!! • Helps!you!refine!Business!Model!Canvas!hypotheses:! • Very!small!marketsize!may!notbe](https://reader034.vdocuments.site/reader034/viewer/2022042315/5f0399c57e708231d409dad7/html5/thumbnails/3.jpg)
Three Market Size Es0mates
• Total Addressable Market (TAM): Value of all of the buyer/seller rela&onships par&cipa&ng in the market • Served Addressable Market (SAM): The part of the TAM for which your business model’s value proposi&on is strongest • Target Market (Usually) demographic segment of the SAM with the most direct path to success
Defini)on
![Page 4: MarketSize - Carnegie Mellon University · MarketSize • Quan&fies!the!financial!poten&al!of!your!business!! • Helps!you!refine!Business!Model!Canvas!hypotheses:! • Very!small!marketsize!may!notbe](https://reader034.vdocuments.site/reader034/viewer/2022042315/5f0399c57e708231d409dad7/html5/thumbnails/4.jpg)
Total Addressable Market (TAM)
• Quan&fies the en&re chain of buyer/seller rela&onships in your market. • Only need to es&mate the value of the rela&onships at point of consump&on (incorporates the value of all rela&onships in the chain) • Usually very broad • Easiest to es&mate • Examples:
• Mobile apps • Energy consump&on • Health & fitness
Defini)on
![Page 5: MarketSize - Carnegie Mellon University · MarketSize • Quan&fies!the!financial!poten&al!of!your!business!! • Helps!you!refine!Business!Model!Canvas!hypotheses:! • Very!small!marketsize!may!notbe](https://reader034.vdocuments.site/reader034/viewer/2022042315/5f0399c57e708231d409dad7/html5/thumbnails/5.jpg)
Served Addressable Market (SAM)
• A value proposi&on rarely applies to an en&re TAM • Opportunity to sharpen your focus on a par&cular part of the market • SAM es&mates guide investor expecta&ons, important to ar&culate • Examples:
• Mobile healthcare apps for seniors • Self-‐generated renewable energy storage • Health & fitness at work
Defini)on
![Page 6: MarketSize - Carnegie Mellon University · MarketSize • Quan&fies!the!financial!poten&al!of!your!business!! • Helps!you!refine!Business!Model!Canvas!hypotheses:! • Very!small!marketsize!may!notbe](https://reader034.vdocuments.site/reader034/viewer/2022042315/5f0399c57e708231d409dad7/html5/thumbnails/6.jpg)
Target Market
• One more level of refinement • OVen a demographic target • Examples:
• Mobile healthcare apps for seniors target re&rement homes • Self-‐generated renewable energy storage, targe&ng the oilfield services, food manufacturing and automo&ve industries • Health & fitness at work, targe&ng new male employees aged 25-‐40 in companies with annual sales of $500M or more.
Defini)on
![Page 7: MarketSize - Carnegie Mellon University · MarketSize • Quan&fies!the!financial!poten&al!of!your!business!! • Helps!you!refine!Business!Model!Canvas!hypotheses:! • Very!small!marketsize!may!notbe](https://reader034.vdocuments.site/reader034/viewer/2022042315/5f0399c57e708231d409dad7/html5/thumbnails/7.jpg)
“We’ll Capture 1% of Chinese Consumers…”
Common Mistakes
![Page 8: MarketSize - Carnegie Mellon University · MarketSize • Quan&fies!the!financial!poten&al!of!your!business!! • Helps!you!refine!Business!Model!Canvas!hypotheses:! • Very!small!marketsize!may!notbe](https://reader034.vdocuments.site/reader034/viewer/2022042315/5f0399c57e708231d409dad7/html5/thumbnails/8.jpg)
Research Tools
Applica)on
• Library Databases
• Facebook Ads
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Market Size
Ques)ons???