Perhaps the most important question confronting anyone thinking about creating a start-up, or marketing any product for that matter, is determining the size of the potential market.
There isn't an easy answer for this because, frankly, a "market" is not a thing, but an idea. You can't see a market, but you only have an idea that it exists. So, if you can't see something, but you want to measure it, how do you do this?
Well, there are actually several ways to approach this problem, and we'll consider one of these here and other methods in future tutorials.
IS SIZE THE PRIMARY OR SECONDARY DEMAND?
Regardless of the approach, the first thing to consider is whether you want to determine the size of "primary demand" or "secondary demand".
Primary demand is the size of the market for a product category - like "virtual hard drives". Secondary demand is the size of the market for a particular brand - like xdrive.com or idrive.com. As you might imagine, secondary demand is more naturally associated with market share. You can read more about primary and secondary demand in our tutorial on firstmovers.
Since most companies we've dealt with tend to be interested in the demand for new technologies or services, our focus will be on primary demand - or the size of the market for a product category.
DECOMPOSE AND BUILDUP