Consulting Consulting
Consulting Finance General
Login Sign up for free Sign up for free
Consulting Finance General
Community
Meeting Board
Consulting Q&A
Interview Partner
Premium Membership
Coaching
Coaches
Coaching Packages
Consulting Q&A
Resources
Case Interview Basics
Case Library
AI Casebot
Tests & Guides
Mental Math Tool
Stress Questions
Drills
Video Tutorials
Brainteaser
Career
Employers
Career Events
Consulting Jobs
Consulting Blog
Sign up for free
Login
Community
Meeting Board
Consulting Q&A
Interview Partner
Premium Membership
Coaching
Coaches
Coaching Packages
Consulting Q&A
Resources
Case Interview Basics
Case Library
AI Casebot
Tests & Guides
Mental Math Tool
Stress Questions
Drills
Video Tutorials
Brainteaser
Career
Employers
Career Events
Consulting Jobs
Consulting Blog
Schedule mock interviews on the Meeting Board, join the latest community discussions in our Consulting Q&A and find like-minded Interview Partners to connect and practice with!
Meeting Board
Consulting Q&A
Interview Partner
Premium Membership
Back to overview
Anonymous A
on Dec 10, 2017
Global
I want to receive updates regarding this question via email.

How would you market size the amount of rental bikes in LA/ another city/ ?

2
5.5k
21
Write an answer
Be the first to answer!
Nobody has responded to this question yet.
Top answer
Deleted
Coach
edited on Jun 03, 2019
Approach: Convince in BOTH personal and case fit | 150+ real life interviews | Communications expert

Hi,

For market sizing questions the following 3 aspects are important:

  • State your approach: Which approach would you take? For example top-down approach, bottom-up approach, demand side, supply side etc.
  • Sensitivity check: What are the parameters that significantly influence your result?
  • Sense check: Conduct another approach, or even a third approach (often not necessary, but state this because you would do this in a real case!) and triangulate around your results

In general – and I am sure you know that – the result of your approach is much less important than you approach! Hence, use the opportunity to show that you can see the bigger picture but also consider the details and that you are structured in your approach.

Also: Do communicate with your interviewer!

Now, how could you structure your approach using a demand side framework?

  • Start with the population of LA. Assume 8m inhabitants. Ask for a better number and use it if nothing else is provided.
  • Assume a life expectance of 80 years and assume a uniform population distribution. Given these assumptions, there would be 1m people per 10 year age bucket (do use numbers that are easy to work with, especially in situations under stress)
  • Assume bike penetrations (percentage of population that would use a bike):
    • Age bucket 11-20: 5% --> 1m x 5% = 50k bikers
    • Age bucket: 21-30: 10% --> 1m x 10% = 100k biker
    • Age bucket 31-40: 5% --> 1m x 5% = 50k bikers
    • Hence, there are 200k “would-be” bikers in total.
    • Comment: For simplicity, assume 0% for the other age buckets. Ask the interviewer if you should be more specific – if so, make assumptions for the other age buckets as well.
  • Assume that for each age bucket (note: simplification!), 80% of those who would use a bike own their own bike and 20% do not own a bike. Hence:
    • 200k “would-be” bikers x 20% = 40k bikers that do not own a bike
  • Assume that for each age bucket (note again: simplification!), 50% of those bikers who do not own their own bike would indeed pay for renting a bike. Hence:
    • 40k bikers without own bike x 50% = 20k bikers who do not own their own bike but are willing to pay for renting a bike
  • Assume that all of these bikers are served with an average capacity utilization of 20% (do ask for a better number!). Hence:
    • 20k bikers who do not own their own bike but are willing to pay for renting a  bike x 20% = 4k rental bikes

Now, in reality you would (and so you should do in an interview) sensitivity and sense check your numbers! In a sensitivity check, you would discuss with the interviewer what you think are the parameters that drove your result, e.g. is it realistic that there are no bikers aged 41-50 that would rent bikes? Probably not, so state again, that this is just a simplification.  In a sense check, you would conduct a totally other approach, e.g. a supply side approach or try to get reference numbers from public registers, insurance registers etc.

Remember that the result is much less important than your approach! The interviewer wants to see that you think in a structured way about problems and he wants to be confident that you can easily replicate these results! Therefore, it is important that you communicate with your interviewer and let him participate in your approach. If you are given the problem, take 10 minutes without talking with the interviewer and then state the correct number you will not pass the interview.

I have more market sizing cases available and am happy to coach.

Hope this helps.

Best regards

9
Contact coach
0 comments
Anonymous B
on Dec 19, 2017

Our Goal: #Rental Bikes /Major City

  1. #Rental Bikes = (Bikes/person) * (total amount of people)
    • = 1 bike per 50 person (assumption) * 5M people
    • = 0.1M bikes in total
    • =100K bikes
  2. Life-span of bikes are approximately 10 months (given the mishandling)
  3. #bike/ lifespan
    • = 0.1M/10months = 0.01M/month or = 10K/month (if you believe the rental bike market is steady)
    • this is the number of new bikes entering every month under steady growth
  4. If you want to integrate a trend:
    • say we have a positive trend in bikes because lot more companies are entering this market
    • Approximately 10% per year, so 10% of the total amount will increase
    • Annually = 100K*10% = 10K
    • So, 100K + 10K = 110K
    • Monthly 10% of 10K = 1K
    • So, 11K/month
    • This is cumulative of all the bikes provided by all the companies in the city.
  5. The answer would be: The average (annual) rental bike market size would be about 110K in LA/major city and about 11K new bikes would be entering the market each month to maintain the market size.

If you are talking about revenue, assuming the cost of a bike is about 100 USD. So the cumulative cost of the bikes is $11M. 

Assuming, each bike charge $1/hour, Average riding time is 15 minutes, Bikes are in use for average 20 hours/day and average usage rate is 20%; Revenue = $1*4*20 hours*30 days* 20% =$480/month

So, the revenue from rental bikes in a major city/LA = $480 * 110K bikes = 48000+4800 = $52.8M annually! Again this is cumulative rental bike market in the dollar and cents term!  

0
0 comments
Similar Questions
Consulting
I got a take-home case from a company. It is so generic. How should I approach this?
on Sep 28, 2024
Global
6
2.0k
Top answer by
Florian
Coach
1400 5-star reviews across platforms | 600+ offers | Highest-rated case book on Amazon | Uni lecturer in US, Asia, EU
58
6 Answers
2.0k Views
+3
Consulting
How to avoid excessive detail when market sizing?
on Apr 24, 2025
Global
5
300+
Top answer by
Daniel
Coach
Ex-McKinsey, Bain & Kearney | 5+ yrs consulting, coaching & interviewing | 95%+ candidate success
11
5 Answers
300+ Views
+2
Consulting
How many primary teachers are there per 28 students
on Jun 06, 2024
Global
6
1.1k
Top answer by
Pedro
Coach
Bain | EY-Parthenon | Former Principal | 1.5h session | 30% discount 1st session
32
6 Answers
1.1k Views
+3
Related Article
Market Sizing
Questions about market size are frequently asked in case interviews in consulting because they require a blend of logic, mathematics, and common sense. They can be asked as standalone questions or as part of a larger case. Applicants who are familiar with market sizing questions can really perform here. What Are Market Sizing Cases?If you're applying to top consulting firms like McKinsey, BCG, or Bain, you're unlikely to escape a market estimation case. Market sizing cases are considered "back-of-the-envelope" calculations because they can be done on the back of an envelope. Despite the name, it's not just about estimating market sizes; other estimations may also be asked for.For example, if you're discussing a British clothing retailer's growth strategy, you could calculate on an envelope how large the online clothing market is and what percentage of the market the retailer already penetrates. If you perform these calculations quickly, the conversation with the client stays fluid, leaving a good impression.You can receive the question about market size as a standalone case (although this is less common) or as part of a more comprehensive problem, such as market entry. The good news: There's no right or wrong answer when it comes to the question of market size. The interviewer is less concerned about the specific number you come up with for the market than the approach you took to arrive at that number. Why Are Market Sizing Cases Commonly Used in Consulting Interviews?Market Sizing Cases are used to test your quantitative and logical abilities. The interviewer wants to ascertain whether you work well with numbers and if you can make informed assumptions and deal with ambiguities. Questions about market size aren't just about the size of markets; they also involve other types of estimations, such as the number of golf balls in a jumbo jet. As you may have noticed, math is crucial in tackling these questions since you don't have a calculator to rely on. Most importantly, you need to be comfortable dealing with large numbers like millions and billions as well as percentages. More on that later. How Do You Best Approach Market Sizing Cases?Now that we understand the theory behind Market Sizing Cases and their relevance to your case interview, let's take a closer look at the process.Segmentation – The Key to Market Sizing CasesIf you've done some reading on case interviews before delving into market sizing questions, you might have come across areas where segmentation is necessary. Segmenting data is a crucial skill you must master as both a candidate in a case interview and in your later career as a consultant. Segmentation generally refers to dividing a larger whole into smaller parts or segments. The principle you need to understand to do this correctly is the MECE principle.MECE stands for "mutually exclusive, collectively exhaustive." Simply put, segmenting a group of data according to the MECE principle means forming subgroups that do not overlap but collectively cover the entirety of the data, meaning no data is missing. An example useful for market sizing questions is dividing a country's population into age groups (as different age groups often behave differently).Below is a breakdown into Group 1 in the age range 0 to 14, Group 2 in the age range 15 to 64, and Group 3 for everyone over 65: Note that none of the groups overlap, so no age is counted twice, but also no age is overlooked. Now that the population is correctly segmented, we can treat each group differently. If we had divided the population of the United Kingdom into the aforementioned groups, we could estimate clothing expenditures per person in these groups in online retail. Common sense suggests that expenditures per person in the 0-14 age group are lower than in the 15-64 age group. We can justify this estimation by noting that the majority of 0-14-year-olds do not purchase their clothing online. 
View article
Related Case
Expert case by
Ian
Based on Bain 1st Round Case (2023): Last Mile Delivery
5.0
4.0k times solved
Advanced
Interviewer-led
Open case
Similar Questions
Consulting
I got a take-home case from a company. It is so generic. How should I approach this?
on Sep 28, 2024
58
6
2.0k
Consulting
How to avoid excessive detail when market sizing?
on Apr 24, 2025
11
5
300+
Consulting
How many primary teachers are there per 28 students
on Jun 06, 2024
32
6
1.1k
Everything for Your Career
  • Interview Coaching
  • Q&A
  • Interview Partner
  • Mental Math Tool
  • Interview Drills
  • Stress Questions
  • Blog
Everything for Your Career
  • Interview Coaching
  • Q&A
  • Interview Partner
  • Mental Math Tool
  • Interview Drills
  • Stress Questions
  • Blog
Popular in Consulting
  • Case Library
  • Meeting Board
  • Case Partner
  • Case Interview Basics
  • Case Interview
  • Consulting Q&A
Popular in Finance
  • Finance Q&A
  • Interview in Investment Banking
  • Investment Banking Salaries
Popular in Consulting
  • Case Library
  • Meeting Board
  • Case Partner
  • Case Interview Basics
  • Case Interview
  • Consulting Q&A
Popular in Finance
  • Finance Q&A
  • Interview in Investment Banking
  • Investment Banking Salaries
Consulting and Finance Employers
  • RWE Consulting
  • Whiteshield Advisory
  • All Employers »
About PrepLounge
  • For Companies
  • For Universities
  • For Coaches
  • About Us
  • Career
  • FAQ
© 2012 PrepLounge
Our servers are powered by electricity from renewable sources.
  • Cookies & Privacy
  • Terms & Conditions
  • Imprint
  • Sitemap
  • Contact
How likely are you to recommend us to a friend or fellow student?
0
1
2
3
4
5
6
7
8
9
10
0 = Not likely
10 = Very likely
Submit feedback
Thanks for your feedback! Your opinion helps us make PrepLounge even better.
Close Close and keep on prepping
Want to leave already?
After your registration you have free access to:
12 mock interviews with peers
360.000+ peers in our community
36 exercises (incl. structuring drills, mental math, brainteasers and more)
Video tutorials
Video case solutions
Sign up for free
Questions or Feedback?
Select category
  • Select category
  • General Feedback
  • Case Interview Preparation
  • Coaching
  • Technical Problems
  • Other
Your name
Your email address
Cancel