I’m working with a founder on his pitch deck, and his market-size slide was one we agreed needed work. Lots of founders use a top-down approach to sizing their market. For example, they estimate the market to be $10 billion and assume they’ll capture, say, 20% of it, resulting in a total market share of $2 billion. Coming up with this is easy, but it’s not the best approach. It doesn’t add much value to the entrepreneur who did the exercise, and investors won’t put much weight on it either.

The better approach is one that’s bottom-up. I’ve written about this before (see here), and I won’t rehash everything in that post. But for entrepreneurs looking for an example of how to do a bottom-up sizing of their market, I like this blog post from Bling Capital. It’s detailed and includes a link to a market-sizing template that’s very helpful. (Note: Its site has been updated, so I’m linking to the post on Internet Archive.)