'Sense check' at the end of a market sizing

Question

Hi,

I'm struggling to make an insightful sense/reality check once I get to my final number in market sizing problems. At the moment, I tend to just say whether my number 'feels' large or not, but was wondering whether there are tangible things to compare it to (e.g. spend per person in that country, etc.)

Thanks!

Answer 1

Hi,

First of all, a sanity check is not mandatory. Thus, no sanity check is better than a bad check.

Now, if you want to do a sanity check, you should find a comparable number that is either available or can be easily calculated (E.g. cross-checking supply approach with demand and visa versa is not a sanity check since it'll take to much time. It's just another method of approaching the case).

Start with an objective - what is the exact number that you want to prove is big or small (note that if the market was calculated in dollars, you still might want to do the sanity check for units)
Look for similar geographies, locations, etc. that you can use as a set up
Try to find the comps that will help you look from a different angle / take a different perspective

Best

Answer 2

Hi there,

Great question!

My best recommendation is that you start reading more. The Financial Times, The Economist, etc. The more you read, the more you'll get a sense for numbers.

In terms of helping you ASAP, however, I highly recommend you lookup references. Some key examples I can think of include:

Country populations
Household incomes across rich, middle income, and poor countries (and segments of society)
Demographic details
Size of major industries (in your home country)
"Random" facts, such as:
- Annual per capita spend on clothes
- Annual consumption per capita of x food item
- Etc.

I have a market sizing presentation + supporting materials. Shoot me a message and I'm happy to take you through this! (Includes a thorough breakdown of some of the key numbers to learn)

Answer 3

Hello!

Indeed, sanity checks and so-whats are key components of a good market sizing.

Even when you have no idea -most of the cases, actually-, you can try to problem-solve it iwth the interviewer (e.g., do we have any benchmark from a similar industry/geography? etc.)

Best regards,

Clara

Answer 4

Hi there,

As it has been said already, the best way to get accustomed to the numbers is to go look for them, trying to compare them to other ones, ex the % of wealthy people to the whole population, the % of people living in big cities etc, as well as random number facts.

Cheers,

GB

Answer 5

Hi,

Thanks a lot for the very interesting question.

I think the other coaches gave you great tips already.

I want to add another one that is especially useful for market sizing. The tip is: propose the interviewer a different approach (also quick and dirty) that will allow you to get to the solution and therefore check whether that is correct.

Hope this helps.

Best,

Antonello

Answer 6

Hi,

I would use this as an opportunity to have a discussion with the interviewer. In the case you don't know or not familiar with the data, try to present the comparison that you will use and discuss with the interviewer if he / she has the data that can help you. Most likely they won't have the data but at least you showed a comprehensive thinking and initiative.

Best,
Iman

Answer 7

Hey, I recently got an offer at Mckinsey. I'll be happy to give you my two cents and do some prep to help you out. Sh... (read entire answer)

Hey, I recently got an offer at Mckinsey. I'll be happy to give you my two cents and do some prep to help you out. Share your profile so I can dm you. Cheers