W6 TAM and user profile_canvas.pptx

W6 TAM and user profile_canvas.pptx - TAM and User Profiles...

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TAM and User Profiles
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Total Addressable Market
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Objective of Market-Sizing Quantify and validate the business opportunity Paint a compelling and defensible picture Communicate to stakeholders 4
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Uses of Market-Sizing Fundraising Business planning and validation Prioritization of segments Identifying major market changes Bar for measuring progress 5
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6 Market-Sizing Project Process Define business strategy assumptions Set timeframe and growth metrics Identify relevant analogs Model market Highlight market trends discuss key implications Select best information sources
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Market-Sizing Process Tips Be conservative in establishing baseline assumptions Get comfortable with making educated assumptions List and research all sources of potential competition, direct and indirect Use established, reputable, recent (3-6 months old) information sources and compare them against one another for consistency Design Excel model for flexibility, reflecting assumptions in editable variables that enable sensitivity analysis (get support from an Excel 7
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Evidence-Based Forecasting Observation Surveys reduce by a certain % for people’s intention to buy, e.g., 80% of those who say they will be will actually buy Analogy: how does a similar product do in the market? Judgment (subjective and based on experience) Market test: not always possible and often expensive
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Evidence-Based Forecasting Chain ratio forecast 10,000 people in target market 30% say they will try the product (e.g., obtained based on survey or focus group) 30% will be aware of the product (e.g., obtained based on survey or focus group) Product will reach 50% of the population (distribution estimate) 10,000 * 30% * 30% * 50% = 450 are likely to try the product Most important things in forecasting Know your assumptions—can be tested & debated Use multiple methods to forecast
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10 Total Available Market (TAM) Definition : Total units/$ available at all potential customer companies for relevant categories of products/services and applications Approach: Top-down analysis using market forecast data Define potential customer spending data to collect: geography market category product category applications Estimate total potential product/service (or application) spending for 5 years (TAM) Research spending on current (analyst- tracked) solutions for potential applications* If product category is not yet tracked by analysts Extrapolate from higher-level budget category data: Define categories (e.g. Capex,R&D) Develop percentages assumptions, validating with analogs for which market data is available If customer spending numbers do not exist
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Anywhere, Anytime, Anyway 0.7 mil. 1.0 mil.
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  • Spring '14
  • khoo

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