{"id":467,"date":"2016-12-26T20:57:57","date_gmt":"2016-12-26T20:57:57","guid":{"rendered":"https:\/\/mattersgraph.com\/?post_type=insight&p=467"},"modified":"2026-04-09T01:25:31","modified_gmt":"2026-04-09T01:25:31","slug":"sizing-up-bad-market-definitions","status":"publish","type":"insight","link":"https:\/\/mattersgraph.com\/es\/insights\/sizing-up-bad-market-definitions\/","title":{"rendered":"004: Sizing Up Bad Market Definitions"},"content":{"rendered":"

Reflecting on 20 years of investing, one investment professional recently remarked to us, \u201cWhen I think about what we\u2019ve gotten wrong in the past, the worst times have been when we believed we had a bigger market size than we really did. There\u2019s just nothing you can do\u2026the company just runs out of room for growth.\u201d<\/p>\n\n

Because of challenges like these, market sizing often makes it to the top of the CDD agenda.<\/p><\/div>\n\n

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Market sizing exercises are sometimes simple: models built in markets where public registration (or a rock-solid database) exists. In other cases, they require complex approaches building on original data. The complexity in these approaches \u2013 combined with the natural quantitative bent of investment professionals \u2013 means that the techniques themselves sometimes become the subjects of significant debate.<\/p>\n\n

Having rigorous debates on these topics is rarely a bad thing, but it is vital that in the midst of the debate, we remember that no degree of savvy design can save a good market sizing approach from a bad market definition.<\/p>\n\n

Here are a few questions we ask to make sure we are defining the market clearly before we size it:<\/p>\n\n