Market Research (Market sizing – Guesstimate) Problem

Market sizing – Guesstimate:

  1. Clarify 
    1. Reduce scope of the question
    2. Demonstrate analytical ability
  2. Create a super equation 
    1. A structure around the problem
  3. Breakdown the problem
  4. List down knowns and unknowns
  5. Ask the interviewer for unknowns
  6. The mini equation to solve a smaller problem
  7. Consolidate
  8. List your edge cases
  9. Sanity check
  10. Interviewer walkthrough

Question: Estimate the number of Google searches per day

  1. Clarify 
    1. Manual Searches?
    2. Manual + Automated searches?
    3. Across all the devices?
  2. Create a super equation 
    1. Total searches per day = No. of unique daily users * average searches per user/day
  3. Breakdown the problem
    1. Problem 01: Number of unique daily users
    2. Problem 02: Daily number of searches 
  4. List down knowns and unknowns
    1. Known: N/A
    2. Unknown: Global population, Population with internet access, Chinese population, Russian population, Global market share of Google, Any other data points
  5. Ask the interviewer for unknowns
    1. Global population: 7.8 B
    2. Population with the Internet: 3.9 B
    3. Chinese population: 1.5 B
    4. Russian population: 150 M
    5. Google global market share: 90%
    6. Google Russian market share: 50%
  6. Solve Mini equation
    1. Unique daily users: 
      1. Population with the internet: 3.9 B
      2. Subtract: Chinese population * 50% Russian population
      3. Subtract: 10% market share of competitor 
      4. 4 B – (1.5B + 70M + 400M)
      5.  4B – 2B = 2B 
    2. Daily number of searches – 3 categories of potential users based on the frequency
      1. Occasional Users (Negligible searches) = 50% = 1B = 0 Searches
      2. Medium frequency users (2 searches a day) = 30% = 600 M = 1.2 B
      3. Power user (10 search a day) = 20% = 400 M = 4 B
  7. Consolidate: Daily number of searches = (0 + 1.2 + 4) B = 5.2 B
  8. List your edge cases: Case that have not been considered
    1. Any search happening on other google product (Gmail/Youtube)
    2. Any search happening via automation
    3. Voice Search
  9. Sanity Check: Go through your equation and calculation a couple of times to rule out any silly mistakes, grossly wrong assumption 
  10. Interviewer walkthrough: Give the interviewer a snapshot of 
    1. Where you started
    2. Your stepwise approach

Toufiq Mahmud