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The best market size estimates are both surprising and convincing. To be surprising is the art of the presentation. To be convincing, you want to estimate your market size in at least two different ways.
First, use Fermi estimates to determine the number of people who will buy your product (top-down market sizing). This requires general stats like 300 million Americans, 8 billion world population, 30 million US businesses, and domainspecific stats like 6 million annual pregnancies.
Second, use SEC filings of comparable companies in the industry to get empirical revenue figures and sum these up (bottom-up market sizing). Bottom-up is generally more reliable. Be sure you are not drawing boundaries too big or optimistic. “If we get only 1% of China…” is a bad start. One of the most convincing things you can do with a bottoms-up estimate is to link or screenshot an invoice with a high price point.
Eric-Jorgenson_The-Anthology-of-Balaji.indd
readwise.io
Bayesian philosophers see the conditional relationship as more basic than that of joint events - that is, more compatible with the organization of human knowledge. In this view, B serves as a pointer to a context or frame of knowledge, and A I B stands for an event A in the context specified by B (e.g. , a symptom A in the context of a disease B).Consequently, empirical knowledge invariably will be encoded in conditional probability statements, whereas belief in joint events (if it is ever needed) will be computed from those statements via the product peA, B) = peA I B) P(B), (1.9) which is equivalent to (1.8).
Judea Pearl - Causality_ Models, Reasoning, and Inference-Cambridge University Press
2000
Similarly, in business the successful companies are not those that work at developing new products for their existing line but those that aim at innovating new technologies or new businesses. As a rule it is just as risky, just as arduous, and just as uncertain to do something small that is new as it is to do something big that is new.
The effective executive
Peter Drucker
...catch up on these, and many more highlights
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