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A couple of practical notes on where a startup can get the data on market size
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Market study research techniques and information sources
Leo Exter, founder @ westartup
Why? Break-even analysis
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
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
Boutique research companies
• Soft drinks: http://www.canadean.com/• Mobile telephony: http://www.canalys.com/
• There’s got to be one for you!
A few aggregators
• http://www.firstresearch.com/• http://www.marketresearch.com/
• Lots of good stuff, but…
Watch out for discrepancies of
definitions.
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
Government does a LOT of research
• National statistics organizations http://statbel.fgov.be/
• European Commissionhttp://ec.europa.eu/public_opinion/index_en.htm
Trade Federation
Trade federations
ESMA is a Leading, non-profit, Association in Europe for Specialist Printing Manufacturers of Screen, Digital and Flexo technology.
Value SourcePopulation 305 million US CensusWorking Population X 50.5% Dept. of LaborChanging Jobs Annually X 15% AssumedUsing Online Job Postings X 50% AssumedWilling to Pay $50 for Posting X 20% AssumedMarket Size in Revenue = $115.5 mln
So how do you use the data for your business model?
DOESN’T WORK THAT WAY!
We’ll be rich if we can get 1% of the market…
First, make sure you understand your consumers and market
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.
Finding competitive data
• Annual reports of publicly listed companies
• Even better: ALL companies have to file their financial statements in Belgium
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.
BOTTOM-UP ESTIMATELast but not least:
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?
Thank you!
www.westartup.eu
@leoexter