Are market sizing questions a type of guesstimate? Like how many laptops are sold in the US every year? How many fish are in the oceans? etc.? Are those guesstimates?
Hi,
I've seen that some books using the word "guesstimates" for market sizing, for brainteasers and for the mix of both (weight of the Boeing). In reality what matters is that there are 2 types of questions:
Best
There are two main types of market sizing questions: the complex ones, which require many assumptions, bottom up. These will be precisely wrong, fine.
The other type are very high level, think a couple of top down assumptions, roughly right. This is what "guesstimate" would be, also called "back of the envelope" or "baby math". FWIW, I've seen a former boss, (ex-McK, CFO) successfully run a $5B company using only baby math. The idea here is to get to the essence of the problem, without getting lost in the noise. Very powerful stuff.
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