Calculating a company's market share without data?
I am working on a start-up, about a software programme, in the Augmented Reality industry and I have no clue about the number of sales of competitors or about their overall profit, so that I can calculate a potential market share for my company.
Could you please provide me with any hints I could work this around?
Thanks!
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Ever thought of the direct route? Asking your competitors? – Mike 13 years ago
2 Answers
You can make up numbers forever but a realistic method is to work out "playing forward" from release for 2 years ... How many will you get in the first month and how will you get them?,
Then the next 3 months how many, how do you get them, how much do they cost on average to get, how much do you bring in from them?
How many dev, support, sales people?
How much in advertising?
Repeat forward quarter by quarter for 2 years ... Where are you at? Have a good and a bad version, take the aveage and you should be close.
If you actually do better that's great but this is realistic numbers investors can believe.
For extra credit do a with and without funding version.
Will pwople read it? Probably not, the main thing this will help with is your ability to talk intelligently to investors because you will have thought about it first.
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So I will be looking at my own sales and profit alone without making any comparisons to competitive products or the market? – Nosuic 13 years ago
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For the most part YES. The market potential is nice, but everyone used that line in 1999 to 2002 and investors are over it. The new question is, what can YOU honestly do in 2 to 5 years if we give you $1M? If the answer is I can hire 5 key staff and return $10M ... then you have your investors. – Robin Vessey 13 years ago
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Cheers for that Robin, sounds like a good piece of advice. – Nosuic 13 years ago
So this is really hard in a lot of markets without public data. When I have had to do this I've gone to the library and dug through every possible related publication and looked for ads, articles, or mentions of competitors. Then I look at their press releases (almost always on their website).
I start using that data to understand who's doing more business, and try to date that back. If someone has a lot of activity all at once, that's often when they hired a PR firm. Some many times a lot of those sales activities happened in the past, they were just announced.
Additionally, sometimes you get lucky when Forbes or something does an article talking about a technology that compares to what you do and throws out some general numbers. That doesn't seem to happen much though ;)
