Market & Competition

How to size your market honestly and understand who else is solving this.

Model · 7 min

What is this?

Market sizing is estimating how many potential customers exist and how much revenue they represent. Competitive analysis is understanding who else — including "doing nothing" — customers could choose instead of you.

Investors usually care less about the total size of an industry than about the specific, reachable slice of customers you can realistically win first.

Why it matters

A market that's too small can't support a venture-scale business. A market that's technically huge but described too broadly ("the $500B travel industry") tells an investor you haven't thought about who your actual first customer is.

Step by step

1Start from your specific first customer segment, not the broadest possible category your product could someday touch.
2Estimate how many of those specific customers exist, and what they'd realistically pay.
3Then show how that beachhead could expand into a larger market over time — the size, then the path to it.
4List real alternatives customers use today, including manual workarounds, spreadsheets, and "nothing" — these are still competition.
5Identify what makes you different in a way that matters to the customer, not just to you.

What good looks like

You can walk someone from "here's the exact customer we win first" to "here's how that expands" — in that order, not the other way around.

Common mistakes

Quoting a huge industry-wide number with no connection to your actual first customer.
Saying "we have no competitors" — this almost always signals you haven't looked hard enough, since "doing nothing" is always an option.
Confusing a large market with an easy one to enter.
Listing competitors without explaining why customers would choose you over them.

Checklist

You can describe your specific first customer segment and roughly how many exist.
You've shown a believable path from that segment to a larger market.
You've named real alternatives, including manual/DIY ones.
You can say, in one sentence, why a customer would pick you over an alternative.