A couple of practical notes on where a startup can get the data on market size

1. Market study
research techniques and information sources
Leo Exter, founder @ westartup

2. Why? Break-even analysis

3. Before you start
• 80/20 rule: 80% data is good enough for now
• Better approximately right than exactly
wrong: beware of precise numbers
• Estimating market size is an iterative
process: you’ll get there in the end

4. Key sources of data:
big-name research firms
• Gartner http://www.gartner.com/
• Forrester http://www.forrester.com/
• IDC http://www.idc.com/
• Good Thing: LOTS of free stuff
• Bad Thing: they collect other people’s guesses,
and add own guesses on top.
• Look for facts, not Big Future predictions

5. Boutique research companies
• Soft drinks: http://www.canadean.com/
• Mobile telephony: http://www.canalys.com/
• There’s got to be one for you!

6. A few aggregators
• http://www.firstresearch.com/
• http://www.marketresearch.com/
• Lots of good stuff, but…

7. Watch out for
discrepancies of
definitions.

8. Definitions are situational,
just like ethics
• The Coca-Cola Company: NARTD beverages
because it wants to look smaller (avoid
competition trouble)
• Pepsi is Nr. 2 in “Cola” market

9. Government does a LOT of research
• National statistics organizations
http://statbel.fgov.be/
• European Commission
http://ec.europa.eu/public_opinion/index_en.htm

10. Trade
Federation

11. Trade federations
ESMA is a Leading, non-profit,
Association in Europe for
Specialist Printing
Manufacturers of Screen,
Digital and Flexo technology.

12. So how do you use the data for your
business model?
Value Source
Population 305 million US Census
Working Population X 50.5% Dept. of Labor
Changing Jobs Annually X 15% Assumed
Using Online Job Postings X 50% Assumed
Willing to Pay $50 for Posting X 20% Assumed
Market Size in Revenue = $115.5 mln

13. We’ll be rich if we can get 1% of the
market…
DOESN’T WORK THAT WAY!

14. First, make sure you understand your
consumers and market

15. Shortcut: look at the competition
• Revenue vs. employee numbers are fairly
consistent within an industry
• Example: a consultancy earns 5-7 times what
it pays an average employee.

16. Finding competitive data
• Annual reports of publicly listed companies
• Even better: ALL companies have to file their
financial statements in Belgium

17. You’re just starting, so…
• Everything will cost more and take longer than
for established companies
– Everything you do for the 1st time will take longer
– People will cost more than you think
– Marketing will cost WAY more than you think
• Throw in a small correction for that:
– Triple it.

18. Last but not least:
BOTTOM-UP ESTIMATE

19. What market can you
realistically reach?
• Are there networks you can use to reach the
entire niche? How many people in them?
• How many sales calls can YOU make per
month?
• If you do get clients, how many can you
actually service?

20. Thank you!
leo.exter@westartup.eu
www.westartup.eu
@leoexter