"To win the market, you first need to understand it. A well-crafted Market Size slide isn't just an impressive figure; it's your compass in the startup landscape," says John Doerr, renowned venture capitalist and chairman of Kleiner Perkins.
Picture this - a pitch deck with one slide that could seal the deal, your Market Size slide.
This is your Total Addressable Market (TAM) tale, your golden ticket to showing potential investors the colossal opportunity that lies ahead.
It's tricky, yes, but oh-so-crucial.
A well-researched TAM can illuminate your business model, dissect the competition, and pave your go-to market.
A tough task, no doubt, but what if there was a way to ace this task while still testing the waters in the nascent stages of your enterprise?
Here is the ultimate guide to demystifying the art of creating a killer Market Size slide in your pitch deck!
But first, let's dig deep into the fundamentals of having a Market Size slide- What it is and its importance.
Market Size Slide: What it is and Why It is Important?
So, what is a Market Size slide and why is it more important than your morning coffee?
Essentially, it's your ticket to show the behemoth your startup could morph into - your Total Available Market (TAM).
You're thinking, "Great, but how?"
Get those numbers right. Back them with concrete research, and credible sources. You don't want your potential investors to cringe at incorrect data, right?
Is your market about to shift gears because of a new regulation or tech? Highlight it!
Growing demand? Flaunt it!
Remember, your TAM is your startup's ceiling, its ultimate potential. It's one of the top three things investors zero in on, right next to your founding team and your business idea.
Underscore the potential, and voila, you've got their attention!
Sizing the Market: Two Approaches
There are two ways to crack the code of your market size - the Top-Down approach and the Bottom-Up method. It's not just a dollar sign; it's the real customers you can reach who will pay for your product.
Tip for founders- Top-down sizing, though instructive, may not mirror your market's reality. Here's a secret nugget - favor the bottom-up approach for estimating your market size.
Let's dive in!
Top-Down Market Sizing Approach
Here's the first route - the Top-Down market sizing.
You begin at the peak, eyeing the entire market landscape. You take in the grand vista of all potential customers and revenue, a sight that might give you goosebumps.
But hold on, you need to zoom in. Slice it down to a portion that's genuinely within your grasp, your Serviceable Obtainable Market (SAM).
For instance, consider launching an AI-driven health-tracking app. With the Top-Down approach, you'll start from the entire digital health market, brimming with potential users and revenue.
Then narrow it down to the segment that's interested in AI technology and proactive about their health. Kind of like scouting a grand forest but earmarking the trees you can actually climb.
Bottom-Up Market Sizing Approach
The Bottom-Up Market Sizing is the most preferred approach in startup fundraising.
Ever built a Lego tower? This approach is just like that. You begin with a single Lego block, your product, and strategize on scaling it.
The key questions here are - Where can your products be sold? At what price? What market share can you realistically capture?
This approach feels like a treasure hunt. Your loot? Your customers. Your clues?
So, how to do the bottom-up market sizing?
- Identify your specific customer.
- Gauge their population.
- Figure out how many you can realistically reach.
- At what price will they buy?
- Now the clincher: How many will buy from you?
This approach shows you've done your homework. You know your customer, your market, and your growth strategy.
The Bottom-Up approach isn’t just sizing, it's strategic planning. And, remember to keep it consistent throughout your pitch!
Isn’t that a smarter game plan?
How to Create an Eye-Catching Market Size Slide?
Alright, you've battled the market sizing beast.
Now let's shift gears and focus on how to exhibit your hard-earned findings in a captivating Market Size Slide.
After all, a brilliant masterpiece deserves an impressive frame, right?
So, you're pondering the puzzle of the perfect pitch? Well, the market size slide in your deck should feature these essential elements:
- Numbers, and More Numbers - Your audience (investors) loves data. Use numbers to tell a compelling story about your market size.
- Market Traits - Got long sales cycles or specific regulations? Highlight them. It shows you understand your playground.
- Credible Sources - Back your claims with reputable sources. Nothing screams 'reliable' like a well-cited slide.
- Industry Analogies - Draw parallels from other sectors. It adds depth to your pitch and makes your concept relatable.
So, you're gearing up to design your deck's market slide? Ensure it answers these crucial questions with clarity and precision:
- TAM: How colossal could this venture potentially become?
- Market Specifics: Diving into the specifics - revenue per customer, sales cycles, let's get detailed.
- Why Now?: Why is it an opportune moment to launch in this market?
- Market Growth: Is the market burgeoning or receding? Show the trajectory!
- Customer's Wallet: What's the price your customers are willing to pay? Let's hear the figure!
Here are some design hacks for an appealing market slide:
- Readable Font: Opt for clear, large, and readable font styles.
- High-Res Images: Use only high-quality images, pixelation is a no-go!
- Simplicity: Embrace minimalism, remember less is more!
That's a wrap, founders!
Just remember, while you're concocting your market size slide, precision and engagement are key. It's not rocket science, but it's your ticket to make investors' wallets dance.
Though a top-down approach might give a swift overview, the real star is bottom-up! It showcases your sweat and smarts, and how you've dug deep into the market trenches.
Sprinkle in some visual jazz, and you're all set to take the investors by storm.
Here's to crafting pitch decks that not only impress but also inspire action. Ready, set, fundraise!