What are the most effective techniques for market sizing a B2B product?
Market sizing is a crucial skill for any B2B product manager, entrepreneur, or investor. It helps you assess the potential demand, revenue, and growth of your product in a given market. But how do you estimate the size of a market that may not exist yet, or that may have multiple segments, competitors, and customers? In this article, we will explore some of the most effective techniques for market sizing a B2B product, and how to apply them in different scenarios.
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Hybrid approach:Combining different market sizing methods, like top-down and bottom-up, cross-validates your estimates. Use one to ballpark the total market, then the other to refine it based on real customer data.
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Recognize the journey:For hardware products, plan strategically around longer development cycles and higher costs. Understand the wider gap between serviceable obtainable market (SOM) and serviceable addressable market (SAM) to bridge the adoption chasm.