Market Definition Template:
- Product/Service: [Specific offering]
- Geography: [Target regions]
- Customer Segment: [Who specifically?]
- Time Frame: [Current year or 5-year projection?]

Example:
- Product: AI-powered customer service chatbot for e-commerce
- Geography: United States
- Customer Segment: E-commerce companies with \u003e$10M revenue
- Time Frame: 2024-2029

TAM = Total market demand if 100% market share

Data sources:
1. Industry reports (Gartner, Forrester, IBISWorld)
2. Government statistics (Census Bureau, BLS)
3. Trade associations

Example calculation:
Total US e-commerce market: $1.1T (2024)
× % needing customer service: 80%
× Average customer service spend: 2.5% of revenue
TAM = $1.1T × 80% × 2.5% = $22B

SAM = Portion of TAM you can realistically serve

Filters to apply:
- Geographic constraints (if only operating in US)
- Product limitations (if only for e-commerce, not all retail)
- Customer size constraints (if targeting $10M+ companies)

Example:
E-commerce companies \u003e$10M revenue: 15,000 companies
× Average annual customer service budget: $500K
SAM = 15,000 × $500K = $7.5B

SOM = Realistic market share you can capture in near term (1-3 years)

Factors:
- Competitive landscape (how many competitors?)
- Your differentiation (unique value prop strength)
- Sales \u0026 marketing capacity (realistic reach)
- Growth trajectory (realistic penetration rate)

Conservative SOM:
Year 1: 0.1-0.5% of SAM
Year 2: 0.5-2% of SAM
Year 3: 1-5% of SAM

Example (Year 3):
SOM = $7.5B × 2% = $150M

Validate top-down sizing with bottom-up:

Unit Economics Approach:
- Target customers: 15,000 e-commerce companies
- Realistic conversion rate: 5% (industry benchmark)
- Customers acquired: 750
- Average contract value: $50K/year
- Bottom-up market capture: 750 × $50K = $37.5M

Compare: Top-down SOM ($150M) vs Bottom-up ($37.5M)
If gap \u003e3x → revisit assumptions

Competitor Categories:
1. Direct: Same product, same target customer
2. Indirect: Different product, solves same problem
3. Substitute: Alternative way to address need
4. Potential: Could enter market easily

Example (Project Management Software):
- Direct: Asana, Monday.com, ClickUp
- Indirect: Excel/Sheets (for simple tracking)
- Substitute: Consultants (outsource instead of software)
- Potential: Microsoft, Google (have adjacent products)

Data Sources Matrix:

Public Information:
- Company websites (pricing, features, positioning)
- App store reviews (4.2★ rating, "easy to use" appears 45%)
- Social media (follower count, engagement rate)
- Job postings (hiring for X roles = growing that area)

Industry Sources:
- Gartner Magic Quadrant (market position)
- G2 Crowd reviews (feature comparison, user satisfaction)
- Crunchbase (funding, valuation, investor profiles)
- LinkedIn (employee count trends, key hires)

Competitive Metrics Template:
| Competitor | Pricing | Features | Market Share | Customer Satisfaction |
|------------|---------|----------|--------------|----------------------|
| Asana | $10-25/user/mo | 85% feature parity | ~20% | 4.5/5 (G2) |
| Monday.com | $8-16/user/mo | 90% feature parity | ~15% | 4.6/5 (G2) |

Create 2D positioning map:
X-axis: Price (Low → High)
Y-axis: Feature Complexity (Simple → Advanced)

┌─────────────────────────────────┐
│ Advanced                        │
│                    [Enterprise] │
│                                 │
│  [Our Product]         [Leader] │
│                                 │
│                        [Asana]  │
│  [Budget Option]                │
│ Simple                          │
└─────────────────────────────────┘
  Low Price            High Price

Insight: Gap in "Simple but Premium" quadrant = opportunity

Survey Questions (ask in this order):
1. At what price would you consider this product to be so expensive 
   that you would not consider buying it? (Too Expensive)

2. At what price would you consider this product to be priced so low 
   that you would feel the quality couldn't be very good? (Too Cheap)

3. At what price would you consider this product starting to get 
   expensive, so that it is not out of the question, but you would 
   have to give some thought to buying it? (Expensive/High Side)

4. At what price would you consider this product to be a bargain—a 
   great buy for the money? (Cheap/Good Value)

Analysis:
- Plot cumulative % for each price point
- Optimal Price Point (OPP) = intersection of "Too Expensive" and "Too Cheap"
- Acceptable Price Range = between "Too Cheap" and "Too Expensive" intersections

Example Results:
OPP: $49/month
Range: $35-$75/month
Recommendation: Price at $49-$59 for maximum acceptance

"Don't you think our innovative new product would solve your problems better than competitors?"

Answer options:
[ ] Yes, absolutely!
[ ] Yes, somewhat
[ ] Maybe

"How well does [our product] solve [specific problem] compared to alternatives you've used?"

[ ] Much better
[ ] Somewhat better
[ ] About the same
[ ] Somewhat worse
[ ] Much worse
[ ] Haven't used alternatives