Seven questions to consider before starting a business Question 3 How big is the market
We are continuing in the training and evaluation of pitches in the #YouthStartCT competition. (Please see photo’s)
This week on sees us moving from the top 50 to the top 25! The pitches are improving and the competition is heating up.
Three weeks ago, I began a series on 7 questions to consider before you start a business. This afternoon, I want to address the third question:- How big is the market?
Market size is simply how many people spend (or are likely to spend) every year to buy the kind of product or service you bring to resolve the “pain” they experience. You should consider the growth rate in your chosen market, based either on buying habits, trends or demographics.
This is important as investors like to invest in companies targeting a market approaching or > $ 1 Billion, or a fast growing market that will achieve that size within 3-5 years. Again, it is up to you to connect the dots for the investor; to have done the hard work in research and offer it in a clear and compelling manner.
You can, of course, target a smaller market (say $200-300 million). This may be fine, if you remember that it may be harder to find investors in those markets.
When I consider the top 50 pitches above, I see that there are a handful that have taken aim at a market approaching > $1 billion. (Well done to these in identifying and referring to the research pointing to these markets)
Remember though, that even if you have identified such a sizable market, it is still on you to show how your product/service will ease the pain or resolve the problem!
Building strong businesses led by resilient entrepreneurs.