Market Sizing

Produces a structured TAM/SAM/SOM market sizing analysis using web research, industry data, and bottom-up calculations.

When to Activate

• User says "calculate TAM", "size the market", "market opportunity"
• User asks "how big is the market for X?"
• User needs market sizing for a pitch deck, PRD, or business case

Input

Required:

• Product/service description: What is being sized
• Target customer: Who buys this

Optional:

• Geography: Default is global
• Time horizon: Default is current year + 5-year projection
• Methodology preference: top-down, bottom-up, or both (default: both)

Execution

Context Check

Before sizing, read

context/product.md

and

context/competitors.md

if they exist. Existing product positioning and competitive landscape inform market definition and assumptions. After completing the analysis, offer to update

context/competitors.md

with market landscape findings.

Step 1: Define the Market

Clarify with the user if ambiguous:

• What problem is being solved?
• Who are the target customers (segment, size, industry)?
• What is the product/service category?
• What is the geographic scope?

Step 2: Research (Parallel)

Use web search tools to gather data from multiple sources:

Data Type	Sources to Search
Industry reports	Gartner, Forrester, IDC, Statista, Grand View Research
Company data	Public filings, earnings calls, analyst reports
Customer data	Census data, industry associations, trade publications
Competitive landscape	Crunchbase, PitchBook, competitor pricing pages
Growth rates	Historical CAGR, analyst projections

Step 3: Calculate TAM (Two Methods)

Top-Down:

1. Find total market category size from research reports
2. Document source, year, and methodology
3. Apply growth rate to current year if data is older

Bottom-Up:

1. Count total potential customers in target segment
2. Determine average annual revenue per customer (pricing research)
3. TAM = Total Customers x Annual Revenue per Customer

Step 4: Calculate SAM

Narrow TAM by applying realistic filters:

• Geographic constraints
• Product capability constraints
• Customer segment constraints
• Distribution/channel constraints

SAM = TAM x (% matching all filters)

Step 5: Calculate SOM

Estimate realistic market capture over 3-5 years:

• New entrant: 2-5% of SAM
• Established player entering adjacent market: 5-10% of SAM
• Account for competitive intensity and switching costs

Step 6: Validate

Cross-check top-down vs bottom-up (should be within 30%). Flag if they diverge significantly.

Output Format

# Market Sizing: {Product/Service}

## Market Definition
- **Problem:** {problem being solved}
- **Customer:** {target segment}
- **Category:** {market category}
- **Geography:** {scope}

## TAM: {$X.XB}
### Top-Down
- {Source}: {total market size} ({year})
- Growth rate: {X%} CAGR
- **TAM (top-down):** {$amount}

### Bottom-Up
- Total addressable customers: {count} ({source})
- Average annual revenue per customer: {$amount} ({source})
- **TAM (bottom-up):** {$amount}

### Triangulation
{How the two methods compare. Flag if >30% divergence.}

## SAM: {$X.XB}
| Filter | Reduction | Rationale |
|:-------|:----------|:----------|
| {Geographic} | {X%} | {why} |
| {Segment} | {X%} | {why} |
| {Product fit} | {X%} | {why} |
**SAM:** TAM x {combined %} = {$amount}

## SOM: {$X.XM} (Year 3-5)
- Competitive intensity: {high/medium/low}
- Realistic capture rate: {X%}
- **SOM (Year 3):** {$amount}
- **SOM (Year 5):** {$amount}

## Confidence Assessment
- **Data quality:** {high/medium/low} - {why}
- **Key assumptions:** {list the 2-3 most impactful assumptions}
- **Sensitivity:** {what changes if key assumptions shift by 20%}

## Sources
1. {Source with URL or citation}
2. {Source with URL or citation}

Rules

• Two methods minimum: Always calculate both top-down and bottom-up.
• Cite every number: No unsourced figures. If estimated, say so explicitly.
• Show your math: Every calculation should be traceable.
• Conservative by default: Use lower bounds when data is ambiguous.
• Date the data: Always note the year of each data source.
• Flag assumptions: Tag with

  [Assumption]

  . Every non-trivial assumption gets called out.
• Tag unverified data: Use

  [Needs data]

  for estimates without hard sources,

  [Source: X]

  for cited figures.
• No vanity TAMs: If the TAM seems unreasonably large, challenge the market definition.