Market Research for Lead Gen
When Hyperke first partnered with tech companies, the market sizing question hit like a ton of bricks. Sure, everyone wants growth, but most founders can't tell you their real market size beyond some vague numbers they grabbed off Google.
Here's the thing about sizing up your market: it's not just math. It's figuring out who's actually gonna buy your product, how many of them are out there, and what kind of money you might see.
Flying blind isn't strategy, it's gambling. Get the sizing right though, and suddenly everything falls into place, from your marketing plan to how much cash you'll need to grow.
Key Takeaways
Figuring out how much money a business can make means looking at the whole market first, then narrowing it down to what's actually possible to reach.
When crunching the numbers, it's best to mix different ways of measuring the market, looking from high-level data down to ground-level facts.
Double-check your guesses by studying what other similar companies are doing, and be ready to change your plans when needed.
Market Sizing Fundamentals for New Products
Understanding Market Sizing Concepts
Look, sizing up markets isn't fancy, it's about figuring out if enough people might buy your stuff. I've watched too many startups crash because they didn't do this homework. At Hyperke, we've learned the hard way: you've got to know how big your pond is before you start fishing.
What Really Matters:
Money on the table (yearly revenue)
How many units might sell
Who's actually gonna buy
Which competitors are already there
Price points that don't scare people away
Say you're selling accounting software. Don't just count every business in town, some are too small, some too big, some too broke. Keep it real.
Market Segmentation Techniques
People aren't all the same, and neither are businesses. You've got to split them up into groups that make sense. Sometimes it's obvious stuff like size or location, sometimes it's trickier like how much they hate their current solution. [1]
Ways to Split Things Up:
Big fish vs. small fish
City folks vs. rural
Tech-savvy vs. old school
Budget buyers vs. premium spenders
Quick deciders vs. committee types
Take a coffee shop POS system. The corner cafe doesn't need what a large coffee chain needs. A food truck's got different problems than a sit-down place. Each group's got its own size, its own headaches.
By focusing on the right B2B market segmentation, you avoid wasted effort and sharpen your outreach to those most likely to convert.
Market Sizing Frameworks
There's this thing called TAM-SAM-SOM. Yeah, it sounds like consultant-speak, but it's just common sense broken down into steps. [2]
The Breakdown:
TAM: The whole enchilada
Every possible customer (if pigs could fly)
Usually a stupid-big number
Good for impressing investors, bad for planning
SAM: The realistic part
People you could actually reach
Folks who might actually need what you're selling
Still pretty optimistic
SOM: The real deal
Your actual slice of pie
What you could grab from competitors
Numbers you can probably hit
Core Calculations and Metrics
Don't overthink this part. Start with basic questions: How many customers might actually buy? What'll they pay? How long will they stick around?
Numbers That Actually Matter:
Cost to get each customer
How much they'll spend
How long sales take
How many quit each year
Growth that makes sense
Bottom line: if your market size looks too good to be true, you probably messed up the math. Better to aim low and hit your target than shoot for the moon and miss.
Approaches to Market Sizing
Credits: Hacking the Case Interview
Top-Down Methodology
Finding your spot in the market doesn't have to be a shot in the dark. Starting big and drilling down works, like peeling back layers of an onion. Companies (particularly the ones who've been around awhile) start with those hefty market reports, then slice and dice until they get to their piece of the pie.
Key steps that actually work:
Start with solid numbers from places like reputable market research firms or government databases
Cut by region and industry (and don't forget those pesky sub-sectors)
Look at who's already there and figure out your realistic slice
The catch? Top-down can make things look better than they are. It's like saying everyone who owns a smartphone might buy your app, sounds great, but we all know that's not happening.
Bottom-Up Methodology
Here's where things get real. Bottom-up means counting actual customers you can reach and doing the math from there. Less sexy, more accurate.
Three things to nail down:
Your actual reachable customer base (be brutal here)
How often they'll buy
What they'll pay (hint: it's usually less than you think)
Take this example that shows up in practice: Say there's 10,000 companies that fit your target. Maybe 5% will bite, paying $1,000 a year. That's your $500,000 market right there. Simple math, hard truth.
Value-Based Approach
When you're selling something new, this approach makes sense. Don't just pull numbers from thin air, figure out what problem you're solving and what that's worth.
Some real-world guidelines:
Map out exactly how much time/money you're saving customers
Get proof from early adopters
Build price points based on actual value, not what competitors charge
Making It All Work Together
Smart market sizing means using all three approaches. When the numbers line up (or at least come close), you're probably on the right track. When they don't, that's your red flag to dig deeper.
Numbers that look too good probably are. And ones that seem too low might miss hidden potential. Cross-checking isn't just smart, it's necessary.
Tips for getting it right:
Run all three methods, even if one seems perfect
Question every assumption (twice)
Keep updating as you learn more
Don't forget to factor in market changes and competition
Market Research and Validation Strategies
Primary Research Techniques
Talking directly to customers is irreplaceable.
Customer Surveys and Interviews
Surveys help quantify demand and willingness to pay. Interviews uncover motivations and barriers.
Pilot Programs and Soft Launches
Launching a minimal version in a controlled setting provides real usage data and feedback to refine sizing assumptions.
Secondary Research Sources
Competitor Benchmarking and Industry Reports
Looking at competitors’ market share and revenue offers a reality check on your projections.
Trend Analysis and Market Forecasting
Industry trends can signal whether your product is entering growth or decline phases.
Validation of Assumptions
Scenario Analysis and Sensitivity Testing
We test best- and worst-case scenarios. What if adoption is half or double our estimate?
Ongoing Data Collection and Iterative Refinement
Market sizing isn’t a one-and-done task. We keep updating forecasts as new data arrives. Incorporating detailed B2B buyer persona examples helps refine assumptions by understanding who truly drives purchasing decisions and what their real pain points are.
Incorporating Competitive Landscape Insights
Mapping Competitors and Market Share Analysis
Understanding competitors’ strengths, weaknesses, and positioning sharpens your obtainable market estimate.
Understanding Barriers to Entry and Market Dynamics
Factors like regulation, customer loyalty, or distribution limitations can shrink the practical market.
Strategic Application of Market Sizing Insights
Informing Go-To-Market and Launch Strategies
Market size informs where to focus sales efforts and which channels to prioritize.
Aligning Market Size with Marketing and Distribution Channels
If your SOM is concentrated in specific regions or segments, tailor your messaging and partnerships accordingly.
Sales Pipeline Development Based on Market Potential
We build sales pipelines sized to match estimated opportunity, avoiding over- or under-investing in lead generation.
Investment and Resource Allocation Decisions
Using Market Size to Guide Budgeting and Scaling Plans
Knowing SOM helps set realistic budgets for marketing, hiring, and infrastructure.
Risk Assessment through Best- and Worst-Case Scenarios
Market sizing scenarios highlight risks and help plan contingencies. Leveraging insights from B2B market research for lead generation ensures your pipeline development aligns precisely with where real demand exists.
Enhancing Product-Market Fit and Adoption Rates
Tailoring Value Proposition to Target Segments
Segment-specific insights allow refining messaging to resonate better and boost adoption.
Leveraging Customer Feedback for Product Iteration
Continuous feedback loops ensure the product evolves to meet real needs, expanding market share.
Long-Term Market Expansion and Growth Forecasting
Identifying Opportunities for Market Penetration and Diversification
Sizing helps spot underserved segments or adjacent markets to enter later.
Strategic Planning for Scaling and Channel Optimization
We use market sizing to plan scaling phases and optimize distribution channels for sustained growth.
FAQ
How do you calculate total addressable market, serviceable available market, and serviceable obtainable market for a new product?
Start with your total addressable market (TAM), that's everyone who could possibly use your product. Then narrow it down to your serviceable available market (SAM), which includes only customers you can realistically reach through your distribution channels and go-to-market strategy. Finally, figure out your serviceable obtainable market (SOM) by looking at what market share you can capture given your competitive landscape, pricing strategy, and resources. This process helps with revenue projection and investment analysis.
What role does customer segmentation and buyer persona development play in demand analysis and market sizing?
Customer segmentation breaks your target market into smaller groups based on consumer behavior, needs, and characteristics. Creating detailed buyer personas helps you understand your audience targeting better and predict adoption rates. This affects your market sizing because different segments have different demand levels and customer acquisition costs. Early adopters might love your product, but the mass market could be harder to reach. Good segmentation leads to better sales forecasts and helps you find niche market opportunities.
How do competitive analysis and competitor mapping impact market opportunity assessment and product positioning?
Understanding your competitive landscape is crucial for realistic market sizing. Competitor mapping shows you where rivals are strong and where gaps exist for your product differentiation. This analysis affects your market penetration strategy and helps you spot underserved customer segments. It also influences your value proposition and pricing strategy. When you know what competitors offer, you can better estimate your potential market share and identify the best distribution channels for market entry.
What's the relationship between product-market fit, customer need analysis, and scaling strategy in market sizing?
Product-market fit happens when your product meets a real customer need that people will pay for. This drives demand generation and affects your conversion rates. Before scaling, you need product validation through market research to confirm genuine product demand. Your scaling strategy should consider industry trends, regional markets, and the customer journey. Good product-market fit leads to higher user growth rates and better revenue potential, which directly impacts your market size calculations.
How do industry analysis, market trends, and growth forecasts help with business opportunity evaluation and market expansion planning?
Industry analysis reveals market potential by showing you overall industry forecasts and emerging trends. This helps with opportunity assessment and strategic planning for new product development. Understanding innovation diffusion patterns tells you how quickly markets adopt new products. Growth forecasts help you plan market rollout timing and identify the best regions for market expansion. These insights shape your product roadmap, channel strategy, and long-term business model decisions.
Conclusion
Market sizing for new products isn’t just a box to check. It’s a tool that can save you time, money, and headaches by focusing your efforts on real opportunities.
At Hyperke, we’ve seen how a grounded market sizing exercise transforms vague plans into actionable strategies that deliver measurable growth. If you’re about to launch or scale a product, start by sizing your market thoughtfully, it’s the clearest way to understand where your efforts will pay off.
Ready to put your market size to work? Reach out to Hyperke, and let’s build your roadmap for growth together.
References
https://infomineo.com/blog/your-market-sizing-toolkit-sources-strategies-and-solutions-to-common-challenges/
https://www.seerinteractive.com/insights/marketing-sizing-with-tam-sam-som