Question: How To Do a Market Sizing at the Appropriate Level of Detail
I was wondering if you had any tips on how to get a read on the interviewer during market sizing specific questions. Since market sizing questions are ambiguous, it is up to the interviewee to establish constraints in the form of assumptions.
So my question is: how do I know if I am going too "deep" into the problem? I recently had my first round interviews with Oliver Wyman, and while I passed the interview, the feedback was that I was taking too long during the market sizing portion.
The problem is, I wasn't taking too long because I was sloppy at math, I was taking too long because I was segmenting too far into the problem.
Thanks in advance.
You set the assumptions (define them explicitly) and generally you get about five minutes, up to ten minutes max.
Further segmentation leads to greater accuracy, but sometimes you don't need greater accuracy -- in which case, it is an inefficient use of time.
If you are trying to get a very rough estimate +/- 25%... is the market big or is it tiny... is it $10 billion or $1 million... then you don't need very precise accuracy, and therefore do not need too many segments.
As a trick, I will often mention several segments, and then assume that two segments offset each other such that the number the two segments combined produce is the average for the market, and not bother splitting out those segments.
If the interviewer says, "Okay, now if I tell you your estimate is wrong... where do you think you went wrong (a.k.a., which assumptions are you least comfortable with)?", be prepared to answer that.