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February 21, 2012 10:03 PM

Categories: Marketing and PR

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Joined: 02/21/2012

I'm developing a business concept and am trying to determine how big the market is. The product does not have *direct* customers (that I know of) however all of the following can be considered *indirect* competitors:

* PogoPlug
* DropBox
* Forklift by Binary Nights
* ZEVO by Tens Compliment
* Crashplan

The product is a desktop application that enhances the experience of using a network attached storage (NAS) drive. It is targeted towards the home user market, so the following types of people can be considered customers:

* Heads of households with at least two individuals.
* Young professionals.
* Prosumer photographers/multimedia artists.

It is a given that each type of customer owns at least one NAS drive to store digital media. It's very likely that they are also male.

There are at least two techniques to determine market size estimates: top-down and bottom-up. I'm running into difficulties with both types of analysis due to my inexperience. Perhaps the readers of this forum can help.

Top-Down Analysis:
2010 NAS sales revenues: $500 mil. (source: Infonetics)
2015 NAS sales estimated revenues: $2 bil. (source: In-Stat)
What percentage are home users? -- How do I find this out?
What percentage of those users can be assumed to be potential buyers? -- What would be a reasonable estimate for this?

Bottom-Up Analysis: 
Ok, I admit - I'm completely stuck here. 
Using the Google Keyword Tools, preliminary research suggests that there are at least 70K monthly local search for generic terms related to my market. However, establishing a high organic ranking or doing CPC for these terms will be very expensive in the short term. Eg: Average CPC can be as high as $35. 

The pricing of our product will probably be a one-time license purchase, costing $30-$50. I am still trying to determine a feature set that can yield subscription-based pricing which will hopefully bump the Lifetime Value of a customer significantly.

So, how would you guys go about estimating the market size?

Discussion:    Add a Comment | Comments 1-2 of 2 | Latest Comment

February 26, 2012 10:55 PM

"Enhances the experience" doesn't tell me much, and "heads of households" is a pretty huge slice -- so it's kind of hard to guess at the potential. You're certainly going about this in the right way, with good sources and instincts, but I think you maybe need to get the product out there and sell it in at least one market to get a better gauge. Or, you could even take Eric Ries' advice and put an offer up on your website *before* you have a product to ship -- just see what % respond within an area of a known size.

Also: At least some of the companies you list (Dropbox, Pogoplug, Crashplan) are in a very crowded space, with wheelbarrows full of VC money; you'd better have a very compelling differential...

May 10, 2012 9:51 AM

Hello friends,

Thanks for sharing your valuable suggestion, Extremely appreciated here.

Best regards
Agili Ron

Discussion:    Add a Comment | Comments 1-2 of 2 | Latest Comment

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