

Ask HN: What is my market size? - shahedkhan30

I'm trying to put together a Pitch Deck, but stumbled upon one of the slides.<p>What would my market cap be?<p>We're a platform where we connect people who don't have enough time to complete their daily errands, and people who want to make a quick buck and complete tasks in their area.<p>From where I see it, anyone who has a full-time job, and doesn't have time to run errands fits in our market cap.<p>139.206 million people are employed. 47% working full time meaning:<p>65.43 Million Americans are Full time workers<p>Is this a reasonable market cap?
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brudgers
> _"From where I see it, anyone who has a full-time job, and doesn't have time
> to run errands fits in our market"_

All that shows is that you didn't do any research and pulled something out of
your "back pocket." It's completely bullshit from a market analysis
standpoint. You need to look at segmentation, and existing alternatives.

The relevant segments have disposable income - i.e. "good jobs" and they have
to live in areas where it makes sense to provide the service, i.e. where there
are people who can perform the errand reliably and are suitable to interact
with the target demographic - "people who want to make a quick buck" often
don't fit those requirements.

Mechanical Turk doesn't really scale to the meat world - in general it's not
worth $3.00 to pick up someone's dry cleaning and deliver it to their door -
never mind going through all kinds of rigamarole online to land the project
and get paid.

Even if there is a meaningful target market segment which is not being served,
the infrastructure to provide reliable services and maintain the concierge
employees is a huge problem - the key to the success of Dabbawala is the
people not the internet.

[<http://en.wikipedia.org/wiki/Dabbawala>]

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kitcar
Market Capitalization (market cap) is a term from finance which refers to the
number of shares of your company outstanding multiplied by the average dollar
value of each share - <http://en.wikipedia.org/wiki/Market_capitalization> . I
think what you are after is potential market size, not market cap.

Anyways, one issue with your calculation is that you assume that 100% of
people have the ability to use your service - I assume they need a computer,
Internet access + a credit card of some type to use your service, and 100% of
US full time works do not have all three those things.

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joshu
Yes, thanks.

He means TAM, total addressable market.

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arnorhs
IMHO: If you have space in your pitch deck for a slide about market cap, it's
probably too long.

Try focusing on the product and your user exclusively. Your pitch deck's most
important role is to explain to who ever is reading that there _is_ a problem,
how you _think_ you can solve it and _why you_ can do it and not somebody
else.

Most people who read a lot of pitch decks would never read the part about
market cap because usually the people making the decks overestimate it and
don't usually have a clue about the actual MC.

The biggest problem in growth will probably be how you will get distribution,
how you will join two separate markets or target audience and that's a really
hard problem to solve.

The distribution and chicken'n'egg problem are a much bigger limiting factor
than the market cap ever will be in your product, so don't worry about it.

Good luck!

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egiva
This is a really helpful comment. Just want to give another vote for brevity
and focusing on product and user details in the PD.

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jambo
You don't have a market cap. At least not one that matters. Don't use that
term in your deck; it means something completely different than what you think
it means. Namely, it is the total value of your business based on what people
have paid for a portion of its equity.

A better title for the slide you describe would be simply "Market" or "Market
Size".

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shahedkhan30
What would I put in the Market Size slide then? Would it be what I listed
above?

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jambo
It should be the maximum number of people that you can convincingly argue are
potential customers. It sounds like you need to do more research.

If you say 65 million people in the US, you should be prepared to answer a
question like: "Out of those 65 million people, how many have a spouse that
doesn't work full time who fills this role?"

~~~
rcavezza
Agreed. Should definitely be more niche - also need to take into account
internet usage and demographics such as disposable income. If someone works
full time and makes less than $20K, they're probably not in your target
market.

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joshuahays
Rather than focus on TAM, focus on what your service brings to a potentially
unlimited amount of users. I would never open a deck or conversation with 'we
will max out at xxx'. That's like starting a job interview out with an apology
for being late.

