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

guesstimation Market sizing
New answer on Nov 02, 2019
2 Answers
792 Views
Joe asked on Nov 02, 2019

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?

Overview of answers

Upvotes
  • Upvotes
  • Date ascending
  • Date descending
Best answer
Antonello
Expert
Content Creator
replied on Nov 02, 2019
McKinsey | MBA professor for consulting interviews

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

Was this answer helpful?
Vlad
Expert
Content Creator
replied on Nov 02, 2019
McKinsey / Accenture Alum / Got all BIG3 offers / Harvard Business School

Hi,

There are two sources of your assumptions:

  1. 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)
  2. 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

Was this answer helpful?
Antonello gave the best answer

Antonello

Content Creator
McKinsey | MBA professor for consulting interviews
202
Meetings
9,184
Q&A Upvotes
70
Awards
83 Reviews