FerroxLabs Market research
When to load this mode
The user wants to size or shape a market — not a specific buyer, but the terrain. Load on "what's the TAM," "is this market big enough," "is the industry growing," "what's the regulatory landscape," or "should we enter this category." Macro work — different scale from buyer-interview craft.
How this differs from switch interviews
Switch interviews work one buyer at a time, walking backward through a recent purchase to find triggers, forces, and the gap between current and desired states. That craft assumes the market exists and you need to know who buys.
Macro research answers a different question: does this market exist at a scale that supports the business the user wants to build, and can the user serve it? Buyer interviews give signal at n=5. Market sizing needs public data, industry reports, regulatory filings, and triangulation. The two cross-check each other; neither replaces the other.
Procedure
1. Define the three numbers. TAM is every dollar spent on the problem globally. SAM is the slice your offering could plausibly reach — same geography, channel, language, segment. SOM is the share you can realistically capture in a defined window. State all three. A TAM without SAM and SOM is marketing copy.
2. Build bottom-up. Discount top-down. Top-down — slicing 0.1% of an industry report — is the laziest method. Build bottom-up: count qualifying buyers, multiply by realistic ARPU, multiply by realistic year-one penetration. If bottom-up and top-down disagree by more than 3x, trust bottom-up.
3. Assess the industry cycle. Four stages, four playbooks. Early (category being defined): customer education is the constraint; narrow segment, tight feedback loops. Growth (demand outpaces supply): distribution is the constraint; race for share. Mature (saturated): differentiation is the constraint; pick a wedge, defend margin. Decline: consolidate cheap or harvest. Misreading the stage costs years.
4. Scan regulatory and structural shifts. Some industries move on regulation: data privacy (GDPR, US state bills), payments (PSD2, open banking), labor (gig classification, remote-work rules), health (HIPAA, telehealth scope), AI (EU AI Act). Name rules in force and in motion. A market about to be re-regulated is a different market.
5. Cross-check with buyer interviews. Run three to five switch interviews against the sized segment. If buyers match — same trigger, same job-to-be-done, same alternatives — sizing has ground truth. If interviews surface a different buyer, the sizing is wrong.
6. Separate "market exists" from "market serves you." A market real for incumbents may be closed to you. Distribution moats, regulatory licensing, capital intensity, network effects, switching-cost lock-in can make a $20B TAM untouchable. Bottom-up should include a reachability discount.
Decision rules
- Use macro research when: the user is choosing an industry, sizing a fundraise, evaluating a category pivot, or pricing into a market they don't yet sell into. Macro precedes commitment.
- Skip macro and go to interviews when: the product ships and the question is "who's buying." Macro sizing on a working business is procrastination.
- Run both when: fundraising or planning category expansion. Investors and boards need top-down narrative and bottom-up evidence.
Anti-patterns
- The $10B-market-just-0.1%-share calculation. A line in every failed deck. The 0.1% comes from somewhere — name those buyers and how you reach them or skip the number.
- Industry reports as ground truth. Reports are written to sell the next report. Categories maximize headline numbers. Triangulate every figure against an independent source.
- McKinsey-grade analysis for a $5k SaaS launch. Match research depth to deal weight. A $50k study for a side project is procrastination dressed as rigor.
- Sizing on yesterday's regulation. Stable-looking industries shift in a quarter. Read the legislative calendar before the report.
- Confusing "growing fast" with "good market." Growth with margin compression — too many entrants, commoditized buyers, platform tax — is worse than slow growth with pricing power.
Before / after
Before: "The global wellness market is $5T, growing 6% annually. We'll capture 0.01%. That's $500M revenue in five years."
After: "Bottom-up: target segment is US hybrid-work professionals 28–45 spending on at-home recovery. Census plus BLS data: ~14M potential buyers. Survey data on category spend: $180 average annual, 22% buy something each year. SAM: 14M × 22% × $180 = $554M. SOM at 0.5% share inside 3 years: $2.7M ARR. Industry stage: late-growth, three incumbents holding 40%; differentiation constraint is real. Regulatory: no current overlap with FDA wellness-claims rule; monitoring. Cross-check: 4 switch interviews against the segment — trigger patterns match (return-to-office fatigue, displaced gym routines), alternatives include incumbents we'd compete with. Reachability: paid CAC $80–140, requiring ~$300k acquisition spend to reach $2.7M ARR. Recommendation: market is real and reachable; the bet is differentiation against incumbents, not category creation."