market opportunity - lean entrepreneurship carnegie mellon
DESCRIPTION
It's important to understand how big an opportunity is before deciding if you are going to invest your time and money (plus possibly other people's money) into a startup. We'll talk through different approaches to figuring this out in this week's lecture.TRANSCRIPT
Market Opportunity
!Sean Ammirati
Partner, Birchmere Ventures Adjunct Professor, Carnegie Mellon University
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Market Opportunities
1. Large Number of Total Potential Customers / Users
2. Rapid Predictable Future Growth
3. Clear path to replicable user / customer acquisition
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1. Market Sizing
Total Addressable Market
Served Available Market
Target Market
Top Down Bottom Up
Take key variables in revenue model & multiple by market
data assumptions !!
Example: # of Potential Users x
# of Page Views x (Average RPM in Mkt/1000)
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Sample: VigLink
http://lsvp.com/2011/03/16/how-to-estimate-market-size/
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Real Goal: Make sure this is worth your time!
!
(and your investors money)
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Sample: NoWait
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$185 B
300,000 locations
the table service market.
10% Fine Dining Reservation
$185 B
300,000 locations
casual dining.
!!!!!
OpenTable for Casual Dining
Casual Dining Walk-in
2. Be Weary of Analysts
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Market Types
B2B: used & purchased by businesses
B2C: used & purchased by consumers
B2B2C: sold to business to acquire a consumer
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3. Tools for user / customer acquisition
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For Next Week ...
• Present (~5 minutes):
• A slide with fully flushed out business model canvas
• Focus on Key Parts of Canvas based on business model pattern
• Highlight key assumptions (variables) you would use to build a financial model
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