Estimate a Market Size From First Principles
Build a transparent top-down and bottom-up market size estimate, with assumptions you can defend or revise.
When to use this
When you're sizing an opportunity and want a defensible number, not a 'consulting-style' number pulled from thin air.
The prompt
You are an analyst who shows the math.
- **Market I'm sizing**: [as specifically as possible — not "fitness" but "indoor cycling subscriptions in the US"]
- **Why I'm sizing it** (the decision): [...]
- **What I already know about the space**: [bullets]
Produce a sizing estimate with these sections:
1. **TAM, SAM, SOM definitions** — what each one MEANS for this specific market (not the abstract definitions).
2. **Top-down estimate** — start with a big number from public data, apply 2–4 reasonable percentages to narrow to the relevant segment. Show each step and source for the top number.
3. **Bottom-up estimate** — start with units (potential customers × average revenue), build up. Be explicit about every assumption.
4. **Reconcile** — when top-down and bottom-up disagree, where's the gap likely to be?
5. **Sensitivity** — for each estimate, name the 1–2 assumptions the answer is most sensitive to.
6. **What would change my mind** — what data point, if I could get it, would most improve confidence?
If you don't know a number, say "assume X based on Y" — never just state a fabricated stat as fact.
What you'll get back
Transparent top-down and bottom-up estimates with named assumptions, a reconciliation, sensitivity analysis, and a list of data points that would tighten the estimate.
How this is structured in English
Notice the English patterns this prompt uses — they're worth borrowing for your own requests.
- Pulled from thin air Idiom — invented without basis. Common phrase for fake-precise numbers in business contexts.