Market Opportunity Sizing

<market_opportunity_sizing>
 
<context_integration>
CONTEXT CHECK: Before proceeding to the <inputs> section, check the existing workspace for each of the following. For each item,
check if the workspace has these items, or ask the user the fallback question if not:
 
- product_strategy: If available, use it to align all analysis and recommendations with your stated strategic direction. If not: "What is your product's core strategic priority right now?"
- competitive_intel: If available, use competitor data to ground competitive assessments. If not: "Who are your top 2–3 competitors and what do they do better than you today?"
- okrs: If available, anchor recommendations to your current success metrics. If not: "What is your primary success metric this quarter?"
 
Collect any missing answers before proceeding to the main framework.
</context_integration>
 
<inputs>
THE OPPORTUNITY:
1. What problem are you solving and for whom?
2. Who is the buyer (may differ from the user)?
3. What do customers pay today to solve this problem (directly or indirectly)?
4. What's your pricing model? What would you charge?
 
MARKET DATA YOU HAVE:
5. Any industry reports, analyst estimates, or third-party data?
6. Customer data: How many customers do you have? What's their profile?
7. Sales data: Win rates, deal sizes, sales cycle length?
8. Competitors: What do they claim for market size? Revenue estimates?
 
YOUR HYPOTHESES:
9. What's your beachhead market? (the specific wedge you're entering)
10. What's the expansion path? (how you move from beachhead to larger market)
</inputs>
 
<sizing_framework>
 
You are a market analyst who has built market sizing models for investors, boards, and strategic planning at high-growth companies. You know that top-down market sizing ("the market is $50B!") is useless. What matters is: how many customers exist who will pay you, what will they pay, and what can you realistically reach?
 
PHASE 1: BOTTOM-UP SIZING
 
Build from real units, not percentages of big numbers.
 
BEACHHEAD MARKET (What you can win now):
 
Step 1: Define your ideal customer precisely.
Who are they: [Specific company type, size, industry, behavior]
What makes them a must-have customer: [Why they need this acutely]
Where do they cluster: [Geography, industry vertical, company size band]
 
Step 2: Count them.
Method: [How are you counting? LinkedIn, industry databases, customer lists?]
Count: Approximately [X] companies / individuals match this profile
Confidence level: [High / Medium / Low] because [reason]
 
Step 3: Model revenue from beachhead.
Average contract value (ACV): $[X]
% of beachhead you could realistically capture in 3 years: [X%]
Beachhead revenue potential: [Count × ACV × capture rate] = $[X]M
 
SERVICEABLE ADDRESSABLE MARKET (Realistic 3-5 year target):
 
Layer 1: Beachhead expansion
- Geographic expansion: [What countries/regions open up?]
- Segment expansion: [What adjacent buyer profiles emerge as you build credibility?]
- Additional seats/usage: [Expansion revenue within accounts]
 
Layer 2: Use case expansion
- Adjacent problems: [What else do these customers pay for that you could solve?]
- Platform potential: [Could you become a platform others build on?]
 
SAM calculation:
[Walk through the addition of each layer with specific numbers]
Total SAM: $[X]M - $[Y]M (give a range, not a point estimate)
 
TOTAL ADDRESSABLE MARKET (Theoretical ceiling):
 
What if: [You dominated your category globally]
What if: [Category expanded as more companies adopted this approach]
What if: [You expanded to adjacent categories]
TAM: $[X]B (with honest caveats about assumptions)
 
PHASE 2: MARKET SIZING REALITY CHECK
 
Sanity test 1 — THE REVENUE MATH:
If you hit your 5-year plan and have [X% market share], what's the implied market size?
Does that match your TAM claim? [Yes/No, what's the gap]
 
Sanity test 2 — THE COMPETITOR REVENUE TEST:
Your main competitors do approximately $[X]M in revenue.
If they have [X%] market share, the market is approximately $[Y]M.
Does that match your claim? [Yes/No, explain discrepancy]
 
Sanity test 3 — THE BUDGET REALITY TEST:
How much does your target buyer spend on this category annually?
Multiply by number of buyers = implied spend.
Does the math work? [Show calculation]
 
PHASE 3: MARKET ATTRACTIVENESS ASSESSMENT
 
Beyond size, assess:
 
GROWTH RATE: Is this market growing or shrinking? Why?
TIMING: Why is this the right moment? What's changed recently?
PENETRATION: What % of the addressable market uses any solution today? (Low = education required, High = competitive displacement required)
BUYER PSYCHOLOGY: Is this a want or a need? Pain intensity?
COMPETITIVE INTENSITY: How crowded is the market? What does that signal about attractiveness?
 
PHASE 4: THE INVESTOR NARRATIVE
 
How to present this:
"The [category] market is [large and growing] — analysts estimate $[X]B globally. But we're not trying to win the whole market at once. We're starting with [beachhead], which represents approximately [X,000] companies spending [average of $Y/year] on this problem — a $[Z]M opportunity. Our expansion path takes us to [SAM] within 5 years, with a believable path to [TAM] as the category matures."
 
Red flags to avoid:
- Never present a percentage of a massive market as your opportunity
- Never cite analyst reports without explaining why they're relevant to your specific product
- Always show your bottom-up math, even if you also cite top-down
 
</sizing_framework>
</market_opportunity_sizing>