--- name: fnd.r-sizing-markets description: Calculates TAM/SAM/SOM and assesses market timing. Use when sizing markets, estimating addressable opportunity, analyzing market timing, or validating opportunity scale. allowed-tools: Read, Write, WebSearch license: Complete terms in LICENSE.txt --- # Market Sizing Calculate market opportunity with TAM/SAM/SOM and timing analysis. ## Canvas Files - **Reads:** 00.mode.md (VENTURE/BOOTSTRAP affects size requirements) - **Reads:** 02.constraints.md (budget, team for SOM calculation) - **Reads:** 01.context.md (industry beliefs to validate) - **Writes:** 03.opportunity.md ## Prerequisites Before sizing market: - `strategy/canvas/00.mode.md` must exist (mode affects TAM requirements) If missing: ``` "Market sizing requires business mode from 00.mode.md. VENTURE mode needs TAM >$1B for institutional investors. BOOTSTRAP mode can target smaller, profitable niches. Run fnd-architect agent first." ``` ## Process ### Step 1: Load Context Read from canvas: - **Mode** from 00.mode.md → determines size thresholds - **Constraints** from 02.constraints.md → informs SOM calculation - **Beliefs** from 01.context.md → hypotheses to validate ### Step 2: Calculate TAM (Total Addressable Market) Use BOTH methods, compare results: **Top-Down Method:** ``` TAM = Industry size from reports × relevant segment % ``` - Source: Gartner, Forrester, IBISWorld, Statista - Cite the report and year **Bottom-Up Method:** ``` TAM = Total potential customers × Average revenue per customer ``` - Count: How many could possibly buy? - Price: What would they pay annually? **Validation:** If methods differ >50%, investigate why. ### Step 3: Calculate SAM (Serviceable Addressable Market) Apply filters to TAM: ``` SAM = TAM × Geographic filter × Segment filter × Technical filter ``` | Filter Type | Example | Typical Reduction | |-------------|---------|-------------------| | Geographic | US only | 30-50% of global | | Segment | SMB only | 20-40% of total | | Technical | Cloud-ready | 50-80% of segment | | Vertical | E-commerce | Varies | Document each filter with rationale. ### Step 4: Calculate SOM (Serviceable Obtainable Market) Apply realistic capture based on constraints from 02.constraints.md: ``` SOM = SAM × Realistic market share % ``` | Timeline | New Entrant | With Traction | Established | |----------|-------------|---------------|-------------| | Year 1 | 0.5-1% | 1-3% | 3-5% | | Year 3 | 2-5% | 5-10% | 10-15% | | Year 5 | 5-10% | 10-20% | 15-25% | **Constraint adjustments:** - Limited budget → lower channel reach → lower SOM - Small team → slower sales velocity → lower SOM - Short runway → less time to penetrate → lower SOM ### Step 5: Assess Market Timing **Why Now? Framework:** | Factor | Question | Signals | |--------|----------|---------| | Technology | What's newly possible? | Cost drops, capability jumps | | Regulation | What's newly required/allowed? | New laws, compliance deadlines | | Behavior | What habits changed? | Adoption curves, search trends | | Economics | What's newly affordable? | Price/performance improvements | | Competition | What gap exists? | Incumbent weakness, market void | **Score each factor 1-5:** ``` Timing Score = Technology + Regulation + Behavior + Economics + Competition ``` | Score | Interpretation | |-------|----------------| | >20 | Strong timing — move fast | | 15-20 | Good timing — proceed | | 10-15 | Questionable — validate further | | <10 | Poor timing — reconsider | ### Step 6: Validate Against Mode | Mode | TAM Requirement | SAM Requirement | |------|-----------------|-----------------| | VENTURE | >$1B | >$100M | | BOOTSTRAP | Any (profitable niche OK) | >$10M | | HYBRID | >$500M | >$50M | If below threshold, flag: ``` "Market size concern for [MODE] mode: - TAM: $[X] (requirement: $[Y]) Options: 1. Expand market definition 2. Adjacent market expansion 3. Reconsider mode (switch to BOOTSTRAP)" ``` ### Step 7: Write Output Write to `strategy/canvas/03.opportunity.md` using output format below. ## Output Format ```markdown # 03. Market Opportunity ## Market Size | Level | Value | Method | Source | |-------|-------|--------|--------| | TAM | $[X]B | [Top-down/Bottom-up] | [Source, Year] | | SAM | $[X]M | [Filters applied] | [Calculation] | | SOM (3yr) | $[X]M | [Share %] × SAM | [Assumptions] | ## TAM Calculation ### Top-Down - Industry: [Name] - Total size: $[X] ([Source]) - Relevant segment: [X]% = $[X] ### Bottom-Up - Potential customers: [N] - Average deal size: $[X]/year - TAM: [N] × $[X] = $[X] ### Reconciliation [Explain any difference between methods] ## SAM Derivation | Filter | Reduction | Remaining | |--------|-----------|-----------| | Starting TAM | - | $[X] | | [Filter 1] | [X]% | $[X] | | [Filter 2] | [X]% | $[X] | | **SAM** | - | **$[X]** | ## SOM Assumptions - Year 1 share: [X]% = $[X] - Year 3 share: [X]% = $[X] - Rationale: [Why these shares are achievable] ## Why Now | Factor | Score | Evidence | |--------|-------|----------| | Technology | [1-5] | [What's newly possible] | | Regulation | [1-5] | [What's changed] | | Behavior | [1-5] | [What shifted] | | Economics | [1-5] | [What's affordable] | | Competition | [1-5] | [What gap exists] | | **Total** | **[X]/25** | | ## Market Trends ### Tailwinds - [Trend 1]: [Impact on opportunity] - [Trend 2]: [Impact on opportunity] ### Headwinds - [Trend 1]: [Mitigation strategy] - [Trend 2]: [Mitigation strategy] ## Market Risks | Risk | Probability | Impact | Mitigation | |------|-------------|--------|------------| | [Risk 1] | H/M/L | H/M/L | [Strategy] | | [Risk 2] | H/M/L | H/M/L | [Strategy] | ## Mode Validation **Mode:** [From 00.mode.md] **TAM Requirement:** [Met/Not Met] **Recommendation:** [Proceed/Expand/Reconsider] ``` ## Quality Criteria Before finalizing, verify: - [ ] Both TAM methods calculated and reconciled - [ ] All SAM filters documented with rationale - [ ] SOM based on constraints, not aspirations - [ ] Timing score completed with evidence - [ ] Mode validation performed - [ ] Sources cited with years ## Boundaries - Does NOT validate customer demand (see fnd.r-scoring-problems) - Does NOT guarantee market capture - Does NOT predict competitor response - Market size is estimate, not fact — cite sources - SOM is constrained projection, not target - Timing assessment is point-in-time, markets change - Does NOT handle multi-market or platform economics