# Market Sizing

> Scout research skill — Market Sizing

- Skill: `nickgallick/market-sizing` (Agent Skill)
- Install (CLI): `npx skillmds@latest add nickgallick/market-sizing`
- Raw SKILL.md: https://api.skillmd.com/api/skills/nickgallick/market-sizing/raw
- Safety review: PASS (external: skill-scanner PASS, skillspector PASS)
- Works with: Claude Code, Claude.ai, OpenAI Codex
- Category: Research & Search
- Author: nickgallick (https://skillmd.com/u/nickgallick)
- Updated: 2026-08-19
- Page: https://skillmd.com/skills/nickgallick/market-sizing

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# Skill: Market Sizing & Business Analysis

No more "big market" vibes. Produce actual numbers.

## Market Sizing Framework

### Top-Down Approach
1. Find the total industry size (search "[industry] market size 2025 2026")
2. Narrow to the specific segment (e.g., "HR software" → "HR software for companies under 50 employees")
3. Narrow further to the geography you'd target first (usually US)
4. That's your TAM (Total Addressable Market)

### Bottom-Up Approach (more reliable)
1. Estimate the number of target customers: how many [personas] exist?
   - Use BLS data, Census data, LinkedIn job title counts, industry association stats
2. Estimate realistic conversion: what % would realistically discover AND pay for your tool?
3. Multiply: customers × price × 12 months = annual revenue potential
4. That's your SAM (Serviceable Addressable Market)

### Pricing Benchmarks by Category
- Developer tools: $10-50/mo individual, $20-100/mo team
- SMB SaaS (scheduling, invoicing, CRM): $30-200/mo
- Enterprise tools: $500-5000/mo per seat or flat
- Consumer apps: $5-20/mo
- Creator tools: $10-50/mo
- Vertical SaaS (industry-specific): $50-500/mo
- API/Infrastructure: usage-based, typically $50-500/mo for active users
- Marketplace: 5-20% transaction fee

### Revenue Model Patterns
- FREEMIUM: Free tier + paid upgrades. Best for viral/network-effect products. Expect 2-5% conversion to paid.
- FREE TRIAL: 7-14 day trial then paid. Best for tools with clear value prop. Expect 10-25% conversion.
- USAGE-BASED: Pay per API call, message, transaction. Best for infrastructure/API products.
- SEAT-BASED: Per user per month. Best for team collaboration tools.
- FLAT RATE: One price for everything. Best for simple tools with clear scope.
- TRANSACTION FEE: % of each transaction. Best for marketplaces, payment tools, booking tools.

### Revenue Projections Template
At [price point]:
- 100 customers = $X MRR / $X ARR
- 1,000 customers = $X MRR / $X ARR
- 10,000 customers = $X MRR / $X ARR
- Breakeven estimate (covering infrastructure + Nick's time): ~X customers

### Red Flags
- Market where customers expect free (social media tools, basic productivity)
- Market dominated by one player with a generous free tier
- Market with aggressive price competition driving toward zero
- Market where the buying decision requires committee approval (slow sales cycles)
- Market with high churn by nature (seasonal businesses, project-based work)