Market research · Marketing

Tools to find market size for a startup in numbers

gaurang jindal looking for co-founder for hyper local social networking platform

July 18th, 2018

Can anybody help me out to find the market size in number ?Did you know any tools by which I can find it

Pratyush Nema Founder

July 21st, 2018

Hi, I am not sure any service can give you a detailed and accurate number of customers in the market. examining your competitive reports and the annual summit of top industry leaders is a most convenient way to outline your market.

Vlad Khomutov Founder @ Fast Venture, Founder @ Propel Digital, Co-Founder @Webreel, Co-founder @Fitland

Last updated on September 19th, 2018

I think most people approach this backwards.


The market size is the simplest way for investors to gauge how much money they can make off of your idea. If you sell ice cream, your market size is 7 billion people, because everyone loves ice cream, right? Does that mean you can raise tons of money for your ice cream startup? Hell no.


By the time you talk to investors, you need to achieve product-market fit, which is a term that describes strong organic growth of your product usage and you're brining in revenue.


If you're just starting out, instead of worrying about how many hundreds of millions of people can benefit from your product, worry about finding your first paying customer and making sure their experience is 5 stars. If you fail at this step, it will be hard to scale. If you succeed, you get a blueprint for successfully onboarding your next customer.


Then, calculate how many paying customers you need to sustain you (and your team if you have it) for one year. Let's say, you need $100K to take care of yourself and your family. Let's say your build Wordpress sites. Your offer is $1000. You need to make 100 sales in a year.


I call that Customer Critical Mass. Anything below, you're losing money. Anything above, and you're unlocking growth.


Work towards that, and if you can reach your CCM, you can start worrying about the big picture.


I wrote more about the process here:

https://fastventure.co/foundation/demand



I hope that helps,


Vlad



Paul Garcia marketing exec & business coach

August 2nd, 2018

It's broadly called personal research. There is no one tool. And it is likely going to require a lot of analysis and inference as to market size. You can certainly find what spending in a particular industry is very easily, but that does not tell you the average transaction size or lifetime value of a customer.


This kind of deep dive into your proposed industry is more valuable than you can imagine. You need to know more about how your industry works than anyone else you talk to, and that learning process through research is what ensures you make good decisions for your business. If it were easy and there were handy tools out there it wouldn't be teaching you anything. You need to be able to think like those others already in your industry and know how to get at this information the same way they would. That gives you extremely valuable insight into how customers are developed and maintained.


There are certainly tools to get at some information backwards. For example, the US Census Bureau has a department that works with economic survey data. But being able to know what the data means requires a deeper understanding of how each industry works. That's the knowledge you build.


Market size data is a trivial fact among the many things you need to know about your proposed business. Yes, it's important to know what the maximum possible group of customers could be, and how much competition there is for those customers. But, what's more important to know is how many customers you need flowing in to be a profitable business. The overall figure only tells you how hard you might need to fight for those customers and how different you need to be to stand out. It doesn't tell you whether you'll get those customers or not.


So, start with the economic survey data, but also read your industry trade magazines and their archives. Get to know your industry from the inside. Don't assign so much importance to the overall size figure. I could say that the liquor industry sells $91B annually, but that really means nothing in terms of whether a new distillery would be profitable or not.

Alexandre Azevedo Founder of The Traction Stage Blog & Podcast

Last updated on November 26th, 2018

Hello, Gaurang! Nice to e-meet you!

Take a look at this post I wrote about Market Size Assessment. There you'll find a spreadsheet designed to help on numbers calculations.

Please, let me know if you need any help.

Best,

Alex