3 builders who never spoke to each other

Do the market arithmetic before you commit

Multiply the count of plausible buyers by what each spends and how often, then discount hard for the share you could realistically reach and win. Writing the numbers down turns a hunch about a big opportunity into something a reader can argue with, and usually shrinks it.

The method

1. 01

   Size a market as four multiplied numbers - how many potential customers, how much they spend, how often they buy, and what they'll tolerate paying.

2. 02

   Size the market arithmetically: multiply how many potential buyers exist by what each spends and by how often they buy, then adjust for the growth rate.

3. 03

   Discount a headline market size by how many people want the thing, how many have heard of you, and how many actually like you, before you forecast sales.

4. 04

   Start funnel maths from total addressable market rather than from visitors, and ask what share of that spending you could realistically take.

5. 05

   Work backwards from the customer count you need through your conversion rates, so you can see the traffic requirement before you pick a niche.

What it returned

• 20,000

  Justin's worked example: 20,000 SaaS companies spending $10 million between them on helpdesk apps in a year.

• 26,400,000

  Justin's chain for Marketing for Developers: 26,400,000 programmers worldwide, 264,000 who want to learn marketing, 50,000 who know who he is, 20,000 fans, and 7,000 who bought.

• 1,000

  For 1,000 customers at a 40% trial-to-paid rate you need 2,500 trials, and at a 1% visitor-to-trial rate that means 250,000 visitors.

• Justin's version of the funnel runs from total market to visitors, then trials, then customers.

Sources

• How do I build something people want?Justin Jackson · justinjackson.ca · First, the market you target matters · undated
• How I would build a new startup if I had to do it all overJustin Jackson · justinjackson.ca · 3. Find a good market with good fundamentals. · undated
• The myth of the niche marketJustin Jackson · justinjackson.ca · My experience · undated
• Business is like surfingJustin Jackson · justinjackson.ca · What makes a good market · undated
• The roadmap to Product/Market Fit (PMF)… maybeJason Cohen · longform.asmartbear.com · A theory of why they will buy · 2023-12-24
• When Your Audience Isn't Who You Think They Are - SparkToroSparkToro · sparktoro.com · First, the market size · 2026-06-25
• 42 Questions to Ask Before Starting a BusinessPreetam Nath · preetamnath.com · Is there a large enough market to help my business reach its revenue goals? · 2021-01-10