How do you come up with numbers for a guesstimation/market sizing question?

Question

I know that the logic in answering the questions is more important but I'm having too much trouble coming up with numbers in the first place. I spend way too much time trying to think of a non-ridiculous numbers that I don't really think of how to solve the question. Could somebody help me out with this?

Answer 1

Hi Joe,
personal experience and common sense are the 2 main sources for numbers estimation. My advice is to go with easy-to-use number (e.g. instead of 47 use 50) and to check 1 or 2 important and uncertain numbers with interviewer (e.g. "I'm not familiar with this market, can I proceed with this number?" or "does it make sense?").

I share some examples of market sizing with some good number estimation arguments:

https://www.preplounge.com/en/consulting-forum/how-much-would-you-charge-to-clean-all-the-windows-in-seattle-4965
https://www.preplounge.com/en/consulting-forum/market-sizing-milk-consumption-5087
https://www.preplounge.com/en/consulting-forum/how-would-you-calculate-the-value-of-a-cow-4982

Hope it helps,
Antonello

Answer 2

Hi,

There are two sources of your assumptions:

Personal experience (e.g.in my apartment building with 100 apt every morning I see 10 dogs being walked, thus my assumption is that 10% households have the dogs)
General knowledge (It is generally known that the average size of the family is 3 people, thus I will use this number to calculate the households)

It's also important to adjust the numbers (e.g. on Manhattan people are usually single and busy and thus the average household size there will be 2 people)

Best