Identifying+the+Opportunity+V+-+Sizing+and+evaluating+market+opportunities

Estimating the size and scope of market opportunities, Gate 1 review
Wednesday, February 8, 2012 <>

Topic overview:
For the past three weeks we have explored tools and techniques for finding Product Opportunity Gaps (POGs) -- places where customer needs, wants, and desires are not being met by the products and services currently available in the marketplace. The next step in bringing an innovative new product or service to market is selecting which of the POGs represent the most promising opportunities for your organization to pursue. The purpose of a Gate 1 review is to do an initial review and assessment by multiple stakeholders of the opportunities identified. Out of this review should come a decision regarding which, if any, of the identified opportunities are promising enough to invest further study in (and to invest the resources that doing so requires).

Our efforts to date have involved expanding the number of possibilities that we consider for new product opportunities. Now we need to narrow our options down to a specific opportunity and sell the idea that this is a good opportunity to other interested stakeholders. To do so, we now need to:
 * Make some initial estimates of the size of this opportunity (small, medium, large, ginormous, etc.)
 * Evaluate whether our organization is in a strong position to take advantage of this opportunity
 * Sell the idea to our stakeholders as simply and concisely as possible.

To that end, we will spend today's class working on simple techniques for estimating the size of the market opportunity in a very preliminary way. We will also explore the concept of //customer scenarios// through which we can explain our POGs as short stories that illustrate the opportunity with fictional characters.

Preparation for class:
Prior to today's class you need to complete the following exercise. **Do this exercise by yourself!** Do not discuss your answers or the reasoning you used to arrive at them with your teammates or classmates before class. Doing this exercise by yourself is important. We will combine the estimates that you came up with individually in class to explore the different ranges but for the estimates to be truly independent they need to be done, well, independently.

Step 1: Write down the Product Opportunity Gap your team arrived at for challenge problem #1 clearly and precisely.

Step 2: Define, at a very basic level, who your target customers will be. That is, the people affected by the POG you've identified. For example, you might have identified "professional men aged 25-35 working full-time in an office environment in the GCC" or "Teenage girls in high school in China who would like to learn English". These are sufficiently detailed descriptions for this exercise, though you should be as specific as you feel you need to be.

Step 3: Devise a way to estimate the size of the opportunity that this POG presents. Write down a description for how to do the estimate clearly enough that you could quickly explain your method to the rest of the class in no more than a few sentences.

Step 4: Using whatever resources or information sources you can find, make an estimate of the size of the market opportunity. Write down your calculations and the final value (and units for that value) that you've come up with.

Step 5: Without discussing your answer or the methodology that you used with any of your teammates, come to class prepared to reveal your estimate and discuss the approach you used to arrive at that estimate.

Reference materials:
Slides: