Opportunity Sizing
Figure out if something is worth building before you build it.
How to use
/opportunity-sizing Apply opportunity sizing constraints to this conversation./opportunity-sizing <idea> Size the opportunity for the described product or feature idea.
Constraints
Opportunity Statement
MUST state the opportunity in one sentence before sizing:
"If we build [X], [target users] will be able to [outcome], which drives [business metric]."
If you can't fill this in, the opportunity isn't defined enough to size.
Market Sizing
Work through three layers:
- TAM (Total Addressable Market): everyone who could theoretically use this. Your ceiling.
- SAM (Serviceable Addressable Market): the portion you can realistically reach. Usually 10-30% of TAM.
- SOM (Serviceable Obtainable Market): what you can actually capture in a reasonable timeframe. Usually 1-5% of SAM.
- MUST calculate all three. NEVER cite TAM as if it's achievable.
Revenue Estimation
- Bottom-up (preferred): reachable users × conversion rate × price × retention rate
- Top-down (sanity check): total market revenue × realistic market share
- If bottom-up and top-down diverge wildly, assumptions need work
- MUST run three scenarios: conservative (50% reach, 70% conversion, 150% cost), base case, optimistic (150% reach, 120% conversion)
- Opportunity is worth pursuing if conservative case is acceptable and base case is compelling
Cost Assessment
MUST include all four cost types:
- Build cost: engineering, design, product time (include QA, docs, infrastructure)
- Go-to-market cost: marketing, sales, partnerships, education
- Ongoing cost: infrastructure, support, maintenance, iteration
- Opportunity cost: what you're NOT building while you build this. The hidden cost most teams ignore.
Key Assumptions
- MUST list top 5 assumptions the sizing depends on
- For each: confidence level (1-10), impact if wrong, how to test before committing
- Low confidence + high impact = validate this first, before going all-in
Quick Sizing (Smaller Decisions)
For features or experiments that don't warrant full analysis:
- Who benefits × how much per user = total value
- If maximum possible impact < cost to build, stop here
- If maximum possible impact > 10× cost, stop analyzing and start building
Anti-Patterns
- Optimism bias: founders consistently overestimate. Deliberately discount first estimates by 30-50%.
- TAM delusion: "$50B market" means nothing about your ability to capture any of it
- Ignoring alternatives: users have options including doing nothing
- Static analysis: size where the market will be, not just where it is
- Ignoring time dimension: $10M over 5 years is very different from $10M over 1 year
1---2name: opportunity-sizing3description: Estimate the potential value of a product opportunity before committing resources. Covers TAM/SAM/SOM, bottom-up and top-down estimation, scenario modeling, and key assumption identification. Use when evaluating new ideas, deciding between directions, or building a business case.4---56# Opportunity Sizing78Figure out if something is worth building before you build it.910## How to use1112- `/opportunity-sizing` Apply opportunity sizing constraints to this conversation.13- `/opportunity-sizing <idea>` Size the opportunity for the described product or feature idea.1415## Constraints1617### Opportunity Statement18MUST state the opportunity in one sentence before sizing:19"If we build [X], [target users] will be able to [outcome], which drives [business metric]."20If you can't fill this in, the opportunity isn't defined enough to size.2122### Market Sizing23Work through three layers:24- TAM (Total Addressable Market): everyone who could theoretically use this. Your ceiling.25- SAM (Serviceable Addressable Market): the portion you can realistically reach. Usually 10-30% of TAM.26- SOM (Serviceable Obtainable Market): what you can actually capture in a reasonable timeframe. Usually 1-5% of SAM.27- MUST calculate all three. NEVER cite TAM as if it's achievable.2829### Revenue Estimation30- Bottom-up (preferred): reachable users × conversion rate × price × retention rate31- Top-down (sanity check): total market revenue × realistic market share32- If bottom-up and top-down diverge wildly, assumptions need work33- MUST run three scenarios: conservative (50% reach, 70% conversion, 150% cost), base case, optimistic (150% reach, 120% conversion)34- Opportunity is worth pursuing if conservative case is acceptable and base case is compelling3536### Cost Assessment37MUST include all four cost types:38- Build cost: engineering, design, product time (include QA, docs, infrastructure)39- Go-to-market cost: marketing, sales, partnerships, education40- Ongoing cost: infrastructure, support, maintenance, iteration41- Opportunity cost: what you're NOT building while you build this. The hidden cost most teams ignore.4243### Key Assumptions44- MUST list top 5 assumptions the sizing depends on45- For each: confidence level (1-10), impact if wrong, how to test before committing46- Low confidence + high impact = validate this first, before going all-in4748### Quick Sizing (Smaller Decisions)49For features or experiments that don't warrant full analysis:50- Who benefits × how much per user = total value51- If maximum possible impact < cost to build, stop here52- If maximum possible impact > 10× cost, stop analyzing and start building5354### Anti-Patterns55- Optimism bias: founders consistently overestimate. Deliberately discount first estimates by 30-50%.56- TAM delusion: "$50B market" means nothing about your ability to capture any of it57- Ignoring alternatives: users have options including doing nothing58- Static analysis: size where the market will be, not just where it is59- Ignoring time dimension: $10M over 5 years is very different from $10M over 1 year
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