@ruaruababa/vibe-kit 1.0.0

package/skills/market-sizing-analysis/SKILL.md

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+---
+name: market-sizing-analysis
+description: This skill should be used when the user asks to "calculate TAM",
+  "determine SAM", "estimate SOM", "size the market", "calculate market
+  opportunity", "what's the total addressable market", or requests market sizing
+  analysis for a startup or business opportunity.
+metadata:
+  version: 1.0.0
+---
+
+# Market Sizing Analysis
+
+Comprehensive market sizing methodologies for calculating Total Addressable Market (TAM), Serviceable Available Market (SAM), and Serviceable Obtainable Market (SOM) for startup opportunities.
+
+## Use this skill when
+
+- Working on market sizing analysis tasks or workflows
+- Needing guidance, best practices, or checklists for market sizing analysis
+
+## Do not use this skill when
+
+- The task is unrelated to market sizing analysis
+- You need a different domain or tool outside this scope
+
+## Instructions
+
+- Clarify goals, constraints, and required inputs.
+- Apply relevant best practices and validate outcomes.
+- Provide actionable steps and verification.
+- If detailed examples are required, open `resources/implementation-playbook.md`.
+
+## Overview
+
+Market sizing provides the foundation for startup strategy, fundraising, and business planning. Calculate market opportunity using three complementary methodologies: top-down (industry reports), bottom-up (customer segment calculations), and value theory (willingness to pay).
+
+## Core Concepts
+
+### The Three-Tier Market Framework
+
+**TAM (Total Addressable Market)**
+- Total revenue opportunity if achieving 100% market share
+- Defines the universe of potential customers
+- Used for long-term vision and market validation
+- Example: All email marketing software revenue globally
+
+**SAM (Serviceable Available Market)**
+- Portion of TAM targetable with current product/service
+- Accounts for geographic, segment, or capability constraints
+- Represents realistic addressable opportunity
+- Example: AI-powered email marketing for e-commerce in North America
+
+**SOM (Serviceable Obtainable Market)**
+- Realistic market share achievable in 3-5 years
+- Accounts for competition, resources, and market dynamics
+- Used for financial projections and fundraising
+- Example: 2-5% of SAM based on competitive landscape
+
+### When to Use Each Methodology
+
+**Top-Down Analysis**
+- Use when established market research exists
+- Best for mature, well-defined markets
+- Validates market existence and growth
+- Starts with industry reports and narrows down
+
+**Bottom-Up Analysis**
+- Use when targeting specific customer segments
+- Best for new or niche markets
+- Most credible for investors
+- Builds from customer data and pricing
+
+**Value Theory**
+- Use when creating new market categories
+- Best for disruptive innovations
+- Estimates based on value creation
+- Calculates willingness to pay for problem solution
+
+## Three-Methodology Framework
+
+### Methodology 1: Top-Down Analysis
+
+Start with total market size and narrow to addressable segments.
+
+**Process:**
+1. Identify total market category from research reports
+2. Apply geographic filters (target regions)
+3. Apply segment filters (target industries/customers)
+4. Calculate competitive positioning adjustments
+
+**Formula:**
+```
+TAM = Total Market Category Size
+SAM = TAM × Geographic % × Segment %
+SOM = SAM × Realistic Capture Rate (2-5%)
+```
+
+**When to use:** Established markets with available research (e.g., SaaS, fintech, e-commerce)
+
+**Strengths:** Quick, uses credible data, validates market existence
+
+**Limitations:** May overestimate for new categories, less granular
+
+### Methodology 2: Bottom-Up Analysis
+
+Build market size from customer segment calculations.
+
+**Process:**
+1. Define target customer segments
+2. Estimate number of potential customers per segment
+3. Determine average revenue per customer
+4. Calculate realistic penetration rates
+
+**Formula:**
+```
+TAM = Σ (Segment Size × Annual Revenue per Customer)
+SAM = TAM × (Segments You Can Serve / Total Segments)
+SOM = SAM × Realistic Penetration Rate (Year 3-5)
+```
+
+**When to use:** B2B, niche markets, specific customer segments
+
+**Strengths:** Most credible for investors, granular, defensible
+
+**Limitations:** Requires detailed customer research, time-intensive
+
+### Methodology 3: Value Theory
+
+Calculate based on value created and willingness to pay.
+
+**Process:**
+1. Identify problem being solved
+2. Quantify current cost of problem (time, money, inefficiency)
+3. Calculate value of solution (savings, gains, efficiency)
+4. Estimate willingness to pay (typically 10-30% of value)
+5. Multiply by addressable customer base
+
+**Formula:**
+```
+Value per Customer = Problem Cost × % Solved by Solution
+Price per Customer = Value × Willingness to Pay % (10-30%)
+TAM = Total Potential Customers × Price per Customer
+SAM = TAM × % Meeting Buy Criteria
+SOM = SAM × Realistic Adoption Rate
+```
+
+**When to use:** New categories, disruptive innovations, unclear existing markets
+
+**Strengths:** Shows value creation, works for new markets
+
+**Limitations:** Requires assumptions, harder to validate
+
+## Step-by-Step Process
+
+### Step 1: Define the Market
+
+Clearly specify what market is being measured.
+
+**Questions to answer:**
+- What problem is being solved?
+- Who are the target customers?
+- What's the product/service category?
+- What's the geographic scope?
+- What's the time horizon?
+
+**Example:**
+- Problem: E-commerce companies struggle with email marketing automation
+- Customers: E-commerce stores with >$1M annual revenue
+- Category: AI-powered email marketing software
+- Geography: North America initially, global expansion
+- Horizon: 3-5 year opportunity
+
+### Step 2: Gather Data Sources
+
+Identify credible data for calculations.
+
+**Top-Down Sources:**
+- Industry research reports (Gartner, Forrester, IDC)
+- Government statistics (Census, BLS, trade associations)
+- Public company filings and earnings
+- Market research firms (Statista, CB Insights, PitchBook)
+
+**Bottom-Up Sources:**
+- Customer interviews and surveys
+- Sales data and CRM records
+- Industry databases (LinkedIn, ZoomInfo, Crunchbase)
+- Competitive intelligence
+- Academic research
+
+**Value Theory Sources:**
+- Customer problem quantification
+- Time/cost studies
+- ROI case studies
+- Pricing research and willingness-to-pay surveys
+
+### Step 3: Calculate TAM
+
+Apply chosen methodology to determine total market.
+
+**For Top-Down:**
+1. Find total category size from research
+2. Document data source and year
+3. Apply growth rate if needed
+4. Validate with multiple sources
+
+**For Bottom-Up:**
+1. Count total potential customers
+2. Calculate average annual revenue per customer
+3. Multiply to get TAM
+4. Break down by segment
+
+**For Value Theory:**
+1. Quantify total addressable customer base
+2. Calculate value per customer
+3. Estimate pricing based on value
+4. Multiply for TAM
+
+### Step 4: Calculate SAM
+
+Narrow TAM to serviceable addressable market.
+
+**Apply Filters:**
+- Geographic constraints (regions you can serve)
+- Product limitations (features you currently have)
+- Customer requirements (size, industry, use case)
+- Distribution channel access
+- Regulatory or compliance restrictions
+
+**Formula:**
+```
+SAM = TAM × (% matching all filters)
+```
+
+**Example:**
+- TAM: $10B global email marketing
+- Geographic filter: 40% (North America)
+- Product filter: 30% (e-commerce focus)
+- Feature filter: 60% (need AI capabilities)
+- SAM = $10B × 0.40 × 0.30 × 0.60 = $720M
+
+### Step 5: Calculate SOM
+
+Determine realistic obtainable market share.
+
+**Consider:**
+- Current market share of competitors
+- Typical market share for new entrants (2-5%)
+- Resources available (funding, team, time)
+- Go-to-market effectiveness
+- Competitive advantages
+- Time to achieve (3-5 years typically)
+
+**Conservative Approach:**
+```
+SOM (Year 3) = SAM × 2%
+SOM (Year 5) = SAM × 5%
+```
+
+**Example:**
+- SAM: $720M
+- Year 3 SOM: $720M × 2% = $14.4M
+- Year 5 SOM: $720M × 5% = $36M
+
+### Step 6: Validate and Triangulate
+
+Cross-check using multiple methods.
+
+**Validation Techniques:**
+1. Compare top-down and bottom-up results (should be within 30%)
+2. Check against public company revenues in space
+3. Validate customer count assumptions
+4. Sense-check pricing assumptions
+5. Review with industry experts
+6. Compare to similar market categories
+
+**Red Flags:**
+- TAM that's too small (< $1B for VC-backed startups)
+- TAM that's too large (unsupported by data)
+- SOM that's too aggressive (> 10% in 5 years for new entrant)
+- Inconsistency between methodologies (> 50% difference)
+
+## Industry-Specific Considerations
+
+### SaaS Markets
+
+**Key Metrics:**
+- Number of potential businesses in target segment
+- Average contract value (ACV)
+- Typical market penetration rates
+- Expansion revenue potential
+
+**TAM Calculation:**
+```
+TAM = Total Target Companies × Average ACV × (1 + Expansion Rate)
+```
+
+### Marketplace Markets
+
+**Key Metrics:**
+- Gross Merchandise Value (GMV) of category
+- Take rate (% of GMV you capture)
+- Total transactions or users
+
+**TAM Calculation:**
+```
+TAM = Total Category GMV × Expected Take Rate
+```
+
+### Consumer Markets
+
+**Key Metrics:**
+- Total addressable users/households
+- Average revenue per user (ARPU)
+- Engagement frequency
+
+**TAM Calculation:**
+```
+TAM = Total Users × ARPU × Purchase Frequency per Year
+```
+
+### B2B Services
+
+**Key Metrics:**
+- Number of target companies by size/industry
+- Average project value or retainer
+- Typical buying frequency
+
+**TAM Calculation:**
+```
+TAM = Total Target Companies × Average Deal Size × Deals per Year
+```
+
+## Presenting Market Sizing
+
+### For Investors
+
+**Structure:**
+1. Market definition and problem scope
+2. TAM/SAM/SOM with methodology
+3. Data sources and assumptions
+4. Growth projections and drivers
+5. Competitive landscape context
+
+**Key Points:**
+- Lead with bottom-up calculation (most credible)
+- Show triangulation with top-down
+- Explain conservative assumptions
+- Link to revenue projections
+- Highlight market growth rate
+
+### For Strategy
+
+**Structure:**
+1. Addressable customer segments
+2. Prioritization by opportunity size
+3. Entry strategy by segment
+4. Expected penetration timeline
+5. Resource requirements
+
+**Key Points:**
+- Focus on SAM and SOM
+- Show segment-level detail
+- Connect to go-to-market plan
+- Identify expansion opportunities
+- Discuss competitive positioning
+
+## Common Mistakes to Avoid
+
+**Mistake 1: Confusing TAM with SAM**
+- Don't claim entire market as addressable
+- Apply realistic product/geographic constraints
+- Be honest about serviceable market
+
+**Mistake 2: Overly Aggressive SOM**
+- New entrants rarely capture > 5% in 5 years
+- Account for competition and resources
+- Show realistic ramp timeline
+
+**Mistake 3: Using Only Top-Down**
+- Investors prefer bottom-up validation
+- Top-down alone lacks credibility
+- Always triangulate with multiple methods
+
+**Mistake 4: Cherry-Picking Data**
+- Use consistent, recent data sources
+- Don't mix methodologies inappropriately
+- Document all assumptions clearly
+
+**Mistake 5: Ignoring Market Dynamics**
+- Account for market growth/decline
+- Consider competitive intensity
+- Factor in switching costs and barriers
+
+## Additional Resources
+
+### Reference Files
+
+For detailed methodologies and frameworks:
+- **`references/methodology-deep-dive.md`** - Comprehensive guide to each methodology with step-by-step worksheets
+- **`references/data-sources.md`** - Curated list of market research sources, databases, and tools
+- **`references/industry-templates.md`** - Specific templates for SaaS, marketplace, consumer, B2B, and fintech markets
+
+### Example Files
+
+Working examples with complete calculations:
+- **`examples/saas-market-sizing.md`** - Complete TAM/SAM/SOM for a B2B SaaS product
+- **`examples/marketplace-sizing.md`** - Marketplace platform market opportunity calculation
+- **`examples/value-theory-example.md`** - Value-based market sizing for disruptive innovation
+
+Use these examples as templates for your own market sizing analysis. Each includes real numbers, data sources, and assumptions documented clearly.
+
+## Quick Start
+
+To perform market sizing analysis:
+
+1. **Define the market** - Problem, customers, category, geography
+2. **Choose methodology** - Bottom-up (preferred) or top-down + triangulation
+3. **Gather data** - Industry reports, customer data, competitive intelligence
+4. **Calculate TAM** - Apply methodology formula
+5. **Narrow to SAM** - Apply product, geographic, segment filters
+6. **Estimate SOM** - 2-5% realistic capture rate
+7. **Validate** - Cross-check with alternative methods
+8. **Document** - Show methodology, sources, assumptions
+9. **Present** - Structure for audience (investors, strategy, operations)
+
+For detailed step-by-step guidance on each methodology, reference the files in `references/` directory. For complete worked examples, see `examples/` directory.