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?
What are guesstimate questions exactly?
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:
- Market sizing - In most of the cases market sizing can be a part of the bigger case, but sometimes they give it as a separate case. You need to spend some time practicing various market sizing types.
- Brainteasers - There is no dedicated part of the interview for brainteasers and to be honest they are quite rare. Although the interviewer might want to ask you a brainteaser question either before or after the case. To prepare you simply read the 2-3 most popular books with the brainteasers (Are you smart enough to work at Google?, How would you move mount Fuji?).
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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In order to repeatedly demonstrate prerequisite skills under the pressure of a real case interview, you need to learn the basics and practice cases.
It's essential to know some key figures regarding geographies, population, economies for your case interviews. We summarized them for you here.
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