How big is my cheese (aka market)?

“I know some people who would use this!”

I have heard this before, many times, many of them in my own head. Many companies and projects are started because some people or companies might use your idea. But before we get into spending long hours, sacrifice our time and efforts and embark into creating a company we need to look at our “realistic” market.

Not enough entrepreneurs do this (me being one of them) when assessing a new opportunity.

What do I mean by “realistic”? A market that you can get to easily and cheaply (I will talk about CAC, Customer Acquisition Cost, in another post later on).

Think first bottom-down of your market and then work out the realistic market by looking at what part of that market is really a potential customer. I cannot provide you with a guide of how you need to filter your market but an easy example would be a company trying to sell services to small companies online. The overall market is all the small companies but the real market is the small companies that engage actively online (which in Spain is much smaller than in other European countries). It is an obvious example but you get the picture.

If you are thinking of starting a company or a project based on a need you have identified first try to understand how big it is. The real one, not the imaginary billion dollar market that your emotions and enthusiasm want you to believe…

Advertisement