UARF
  • Home
  • About Us
    • Licensing
    • Internships
    • Giveaway
  • Programs
    • Starting Line
    • I-Corps
    • Spark Fund
    • STRIDE
    • ARCHAngels
    • Startup Support
    • Legal Support
  • Portfolio
  • Blog
  • News
  • Home
  • About Us
    • Licensing
    • Internships
    • Giveaway
  • Programs
    • Starting Line
    • I-Corps
    • Spark Fund
    • STRIDE
    • ARCHAngels
    • Startup Support
    • Legal Support
  • Portfolio
  • Blog
  • News
Search

The
   Entrepreneur Files

​A UARF weekly blog series featuring articles written from the UARF team members.

Learn about new ideas, business tips, and hear our personal stories about 
the things we learned from you, the entrepreneurs!
Scroll down for the latest article!

How To Begin Market Sizing

10/28/2021

2 Comments

 
Picture
By Nick Glavan

Every cohort of I-Corps, we assign the participating teams a worksheet to help them think through their overall market opportunity. We ask them, “If every person who experiences the problem you are trying to solve bought your product or service, how much money would they collectively spend?” This is just one way to think about how big an opportunity a startup business has in their industry. Here are a few common tips I share with early-stage founders taking their first crack at deciding what number is right for them:

There is no one right answer!
No matter how hard you try, there is no exact way to determine how much your future business revenue will be. It will always involve some form of guesswork or assumptions, so don’t stress yourself searching and searching for the one right answer. There are quite a few acceptable estimations. Most reviewers and advisors acknowledge there is some level of uncertainty in determining these numbers, so no need to panic.

Share your rationale in making your assumptions.
Because there isn’t a singular right answer, you will want to explain how you arrived at your number. If the explanation makes sense, the numeric values will too. Many reviewers are more interested in seeing how you got to the market size number than the actual number itself. If you used sound assumptions that seem logical in determining your total, addressable, and target market values, you will convey that you as the business leader can make sensible decisions in other aspects of the business. On the other hand, if you are giving overly optimistic or unsupported rationales, you may appear too out-of-touch with the realities of your market.​

​Back up your estimations with support.

Ideally, your market size estimations will be supported by external sources. If your ideas align with verified research reports, it will be easier to trust that your assumptions are correct. When I try to research the market size for a startup concept, I usually begin with industry database searches on IBISWorld and BCCResearch. You will need a login to access full reports from these resources, but you can review individual report summaries for free. If you read a summary that seems like it will have supporting details for your market, take note of the report title (often given an alphanumeric code), and reach out to your local or university library to see if they have access. You can also ask us for help at uaicorps@gmail.com . Having these validated reports support the estimations you make in sizing your businesses market can really help build confidence in your valuations.


Revisit and refine your estimations frequently.
Once you’ve laid out your market size estimates with logical and supported explanations of how you produced the values, take a step back and look at the market sizing overall. It can help to play devil’s advocate, and really try to pick apart your own assumptions. Does it really make sense that everyone in this industry will buy your product, or is it more likely that only the top 30% of people who get really annoyed by the problem will be the purchasers? Do you have customer interview data that can support that 30% assumption? As mentioned above, there will never be a singular right answer to how big your market is, but by picking apart your own estimates, you get closer and closer to having estimates that you can defend and support from many angles. Plus, the more you learn about your customers, the industry, and the value you provide, the more refined you can make your assumptions. You will eventually reach a point where your estimates are right on target because they are supported by research or interview data that explains your rationale clearly and logically.

No matter how you begin your search for your total, addressable, and target market estimates, if you explain how, you reached your values, you will be moving in the right direction. What other tips do you have for startups trying to determine their market opportunity? Feel free to share them in the comments below. 
2 Comments
Click Here link
7/21/2022 02:45:05 pm

As mentioned above, there will never be a singular right answer to how big your market is, but by picking apart your own estimates, you get closer and closer to having estimates that you can defend I truly appreciate your great post!

Reply
inbound service link
9/29/2022 04:09:25 am

If you read a summary that seems like it will have supporting details for your market, take note of the report title , and reach out to your local or university library to see if they have access. I’m so thankful for your helpful post!

Reply



Leave a Reply.

    Categories

    All
    Communication
    Entrepreneurship
    Funding
    Goals And Achievements
    Guide For Students
    Insight
    Interviews
    Marketing
    Productivity And Organization
    Success Stories

    RSS Feed

PROGRAMS

Starting Line
I-Corps
ARCHAngels
STRIDE

COMPANY

About
Contact
Blog
News
411 Wolf Ledges Pkwy, Suite 208
​Akron, OH 44311
© COPYRIGHT 2018 UARF. ALL RIGHTS RESERVED.
  • Home
  • About Us
    • Licensing
    • Internships
    • Giveaway
  • Programs
    • Starting Line
    • I-Corps
    • Spark Fund
    • STRIDE
    • ARCHAngels
    • Startup Support
    • Legal Support
  • Portfolio
  • Blog
  • News