Learning objectives
By the end you can:
- State, in one sentence, what a market-sizing question actually tests (structured estimation under uncertainty, not a memorized statistic) and explain why a stated range is always the right unit of answer, never a bare point figure.
- Distinguish a stock (an installed base (how many exist right now) from a flow (a rate) how many transact or get sold per year), convert cleanly between them given a replacement cycle, and treat "what's the market for X" as an ambiguous question until you have pinned down which one is being asked.
- Classify TAM, SAM, and SOM for any sizing question, the total addressable market, the serviceable slice a specific business model could realistically reach, and the obtainable share it could realistically win this year, and explain why quoting TAM alone, without SAM/SOM, is a classic novice error.
- Build a top-down estimate (a large aggregate, successively filtered by defensible ratios) and a bottom-up estimate (an atomic unit, scaled up by a chosen driver tree) for the same market, each with every assumption stated aloud and every unit carried through the arithmetic.
- Run two more sizing techniques beyond the basic pair, a supply-side / capacity cross-check (what could the industry's installed capacity to deliver actually support?) and an analogy / comparables build (borrowing a penetration ratio from a genuinely comparable category when no direct anchor exists), and know when each extra method earns its place.
- Segment a market MECE-ly for sizing purposes specifically (choosing a cut (demographic, geographic, channel, or use-case) that neither overlaps nor omits) and catch the sizing-specific double-counting traps a generic MECE tree does not warn you about (bundled offerings, multi-sided marketplaces, stock/flow leakage across segments).
- Triangulate: run two (or three) independent builds, reconcile them into one credible band when they agree, and (when they disagree by a large factor) diagnose the single broken assumption that explains most of the gap, rather than splitting the difference or picking whichever number you prefer.
- Defend every assumption with a named anchor (a benchmark, a logical bound, an analogy, or a stated illustrative figure flagged for verification) instead of asserting a number from nowhere, and build a best/base/worst range with a one-variable sensitivity check that names which single assumption most deserves further research.
- Deliver the sizing conclusion answer-first (the range, the input you are least sure of, and the "so what" for the decision at hand) in the consulting register, while recognizing that the deck/storyline craft itself is out of scope here and belongs to the Presentation galaxy.
Prerequisites & connections
Builds on. CN2.01 (Case Math Under Pressure) is the hard prerequisite inside this branch: every technique here assumes you can already do fast percentage, ratio, and order-of-magnitude arithmetic in your head, round sensibly, and sanity-check an answer without a calculator, this node adds the structure on top of arithmetic you should already own cold. CN1.01 (Issue Trees & MECE) and CN1.02 (Hypothesis-Driven Problem Solving) are the galaxy's recommended lead-ins (advisory, not gating): the segmentation cuts you will use to size a market MECE-ly are the same family of cuts CN1.01 teaches for any problem tree, this node does not re-derive the algebraic/process/segment/stakeholder theory or its general MECE tests, it applies the segment cut specifically to sizing and names the traps unique to that application, and the "state your assumption, then design the test that would confirm or kill it" habit of CN1.02 is exactly what turns a wild guess into a defensible one. If you have not yet run those two, nothing here is blocked, but you will notice the family resemblance immediately.
Two on-ramps feed into this node from outside the Consulting galaxy. E11.03 (The Consulting Case-Interview Lab), the Finance galaxy's phase-11 elective, is the taster this node is the "whole kitchen" for: E11.03 §4.4 already introduced top-down, bottom-up, and a five-step sizing routine, and worked two examples (online food delivery in India, electric-toothbrush replacement heads in the US). If you completed that taster, you already own the vocabulary, this node does not re-teach it, it goes past it: a third and fourth sizing method, a real MECE segmentation trap with a numeric reconciliation, an honest divergence you must diagnose rather than a convergence handed to you, and the discipline of a stated range with a sensitivity check. If you have not run E11.03, nothing here depends on it, but its worked examples are good extra reps once you finish. CL-11.3 "Kite Foods Profitability," the app case E11.03 seeds, is a profitability case, not a sizing one, it is not this node's mapped drill, mentioned here only because it shares the on-ramp.