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How Big is the Pie?
Total Available Market • How many people would want/need the product? • How large is the market be (in $’s) if they all bought?Total Available Market • How many units would that be? How Do I Find Out? • Industry Analysts – Gartner, Forrester • Wall Street Analysts – Goldman, Morgan
How Big is My Slice?
Served Available Market • How many people need/can use product? • How many people have the money to buy the product Total • How large would the market be (in $’s)Available Served if they all bought? Market Available • How many units would that be? Market How Do I Find Out? • Talk to potential customers
How Much Can I Eat?
Target Market • Who am I going to sell to in year 1, 2 & 3? • How many customers is that? • How large is the market be (in $’s) if they all bought? Total Served • How many units would that be?Available Available Market Market Target Market How Do I Find Out? • Talk to potential customers • Identify and talk to channel partners • Identify and talk to competitors
Market Size: Summary• Market Size
Questions: – How big can this market be? – How much of it can we get? – Market growth rate – Market structure (Mature or in flux?)• Most important: Talk to Customers and Sales Channel• Next important: Market size by competitive approximation – Wall Street analyst reports are great• And : Market research firms Like Forester, Gartner
MARKET SIZE A m e
r i c a n s L o v e t o Ea t M e a t a n d S n a c k Giant Markets> Meat: $160B / Snacks: $70B 2009 US Snack Food> Meat Snacks: $4B Retail Sales Varying Growth Rates Salty> Meat: + 5% $30B> Snacks: + 15%>Jerky: + 5% Mega Consumer Trends Converging Sweet>Healthy, More Flavorful, Higher Quality $35B Snacks Driven by Innovation / News Meat Meat Snacks / Jerky Generally Sleepy> Limited Innovation $4B> “Gut Stuffer” Image Source: US Package Facts Change Underway Driven by New Entrants>All-Natural> 10% Growth Latest 52 Weeks Nielsen F/D/M
Market size - Landlords &
Rental Units Units by Landlord Portfolio Size in % of Units, by Landlord Portfolio USA (millions) Size, Owned by a Single Individual 100% 92% 90% 77% 0.06 80% 0.46 70% Small: 1 to 4 60% 50% Medium: 5 to 49 40% 32% 2.20 30% Large: 50 or More 20% 10% 50% of the “Small” landlords own just one unit. 0% Small: 1 to 4 Medium: 5 to Large: 50 or 49 More Rental Real Estate is the Largest “Mom and Pop” business in America: The vast majority of properties are owned by a single individual that owns only one property.Source: US census data
The market size for metastatic
cancer diagnostics in the U.S. is estimated to be $805M p.a.Methodology: Value: Explanation: Source: U.S. population size 313M Total U.S. population in 2012 U.S. Census x Bureau estimate U.S. incidence of all cancers 0.512% Treatment is typically given in ACS Cancer Facts the first year following diagnosis & Figures 2011 = Total U.S. cancer incidence 1.6 M x % diagnosed with regional Cancers that spread to local or NCI SEER 2011 39.4% or distant cancers distant lymph nodes or organs data = Patients w/ regional or 628,420 distant cancers x Cost of diagnosis and Weighted avg. patient cost p.a. JAMA. 2010; $1,285 monitoring (annually) for imaging procedures (2008) 303(16):1625-1631 = Market size for metastatic $805M cancer Dx / monitoring
• Hypotheses to testHypothesis TestThere
is strong Interest in facilitating Interviews (landlord and providers), webrental maintenance support ad conversionService providers are willing to pay for Interviews (need to determinelead generation through our site consensus willingness to pay)There will be a higher response rate Interviews (tenant and landlord), surveyamongst tenants and landlords for an (tenant), web ad conversion of different“exclusive” community messagesTenants are willing to pay a nominal fee Interviews (tenant), survey (tenant),($1-2) for convenient rent/utility online web ad conversion.payment service (Need at least 0.08% CPM conversion to be profitable)Real Estate agents are willing to help Interviewspush this offering to their customers 23
Week 1 Week 3
Hypothesis Test Results• Existing prepaid cards add value Interviewed supermarket User acquisition is critical to a subset of the population executives, payment user engagement is everything – Underpenetrated processors, private label card opportunity manufacturers, prepaid Underpenetrated opportunity – We can find a better program managers, loyalty because people: channel to reach this consultants, and data analytic Don’t understand the value customer segment and firms of the card convert them Don’t know about the card Haven’t bought one yet• Existing prepaid cards are flawed and can be improved Potential customers are aware of – We can do something clever and understand prepaid, but: to shake up the fee Hate the fees structure and/or build in a Haven’t bought one yet new feature (e.g., rewards)• Solution = prepaid + loyalty card – Distributed at retail POS
Week 3 Week 4
Hypothesis Test Results• Existing prepaid cards add value Interviewed end users at End Users see value: to a subset of the population Walmart, food banks, bus More likely to sign up for – Underpenetrated prepaid via assisted POS sale stops, payday lenders, their Active vs. passive sale opportunity homes, and supermarkets hypothesis validated – We can find a better More likely to keep and reload channel to reach this Interviewed execs at Green cards with ongoing cash customer segment and Dot, Rush Card, and NetSpend rewards Higher retention via loyalty convert them hypothesis validated• Existing prepaid cards are flawed Retailers see value: and can be improved New revenue opportunity is compelling – We can do something clever Access to purchasing data to shake up the fee outside the store is compelling structure and/or build in a new feature (e.g., rewards) Industry Trends Loyalty + prepaid programs are the future• Solution = prepaid + loyalty card Industry execs like this idea a – Distributed at retail POS lot and are actively exploring it
Week 4 Week 5
Hypothesis Test Results• Customer awareness and $5 for 5 minutes campaign 20 preliminary signups education are key obstacles to Speak to as many potential customer acquisition and customers as possible ask for Built empathy around customer retention an actual commitment prepaid needs Immediacy• Channel: Assisted sale at POS Security fears trumps current passive j-hook Fees sale Channels – Active sale enhances Discovered other needs awareness & education Job-seeking Saving for kids’ education Understood observed behaviors• Product: Combining prepaid + High churn loyalty Lack of reloading – Cash rebates improve Lack of regular usage retention and incentive to reload Loyalty component not required if you can service the true pain points
Team Deliverable by Tomorrow• Hypotheses
for each part of business model• Test for each of the hypotheses – What constitutes a pass/fail signal for the test (e.g. at what point would you say your hypotheses wasn’t even close to correct?• Plan to get out of the building to test the hypotheses• Summarized in a 5 Minute PowerPoint Presentation – Business Model Canvas – Market Size – Getting out of the building plan Don’t Over Think Your Hypotheses