/market-research

name: market-research
description: "Use this skill when the user needs to size a market, analyze competitors, calculate TAM/SAM/SOM, or validate a business idea. Covers market sizing, competitive analysis frameworks, napkin math, and bottom-up revenue estimation."

Market Research & Competitive Analysis

Markets matter more than ideas. This skill helps you evaluate whether your market is worth entering — and how to validate demand before you build.

Core Principles

• A mediocre product in a great market beats a brilliant product in a dead one.
• All market sizing is wrong. The goal is order-of-magnitude clarity, not decimal precision.
• Competitors are evidence that demand exists. Zero competitors is a warning sign, not an advantage.
• The best solo-founder markets have high pain, fragmented incumbents, and willingness to pay — not the biggest TAM.
• Research is only useful if it changes a decision. Every analysis should end with a clear recommendation.

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Early Validation: Before You Build Anything

Finding Your First 10 People to Talk To

Before doing market sizing, validate that real people have this problem.

**Method 1: Cold Outreach (Fastest — 1-2 weeks)**

• LinkedIn: Search for your ICP's job title → send connection request with a note
• Twitter/X: Search hashtags related to the problem → DM active posters
• Reddit: Find niche subreddits → comment helpfully → DM engaged users
• Email: Find company websites of target customers → reach out to founders/decision-makers

**Cold outreach template:**

Subject: Quick question about [problem area]

Hi [Name],

I'm researching how [ICP role] handles [specific problem]. I noticed you [signal that they have this problem — e.g., posted about it, work in relevant role, use a competing tool].

Would you be open to a 15-minute call this week? I'm not selling anything — just trying to understand the problem better before I build a solution.

Happy to share what I learn from the research as a thank you.

[Your name]

**Method 2: Communities (Higher quality — 2-4 weeks)**

• Indie Hackers: Search for threads where your ICP discusses the problem
• Facebook Groups: Search for niche groups (e.g., "Freelance Copywriters", "SaaS Founders")
• Slack communities: Industry-specific channels, FounderPath, etc.
• Discord: More engaged than most channels for technical audiences

**Method 3: Landing Page Test (Lowest effort — 2-3 weeks)** 1. Build a simple landing page describing the problem you solve (use Lovable or Claude Code) 2. Drive 100-200 visits via communities, social posts, or $100-200 in ads 3. Measure: Signups / Visitors = interest rate 4. Below 5% signup rate → positioning is unclear or demand is weak

After 5 Conversations, Ask Yourself

• Did 3+ people independently describe the same pain? → Demand likely real
• Would they pay? Did anyone name a price unprompted? → Market likely exists
• Do they already use 2+ workarounds? → Problem is acute
• Did you learn something that surprised you? → Explore it in conversations 6-10

**Decision threshold:**

• 3+ people confirm the problem AND 2+ say they'd pay → proceed to market sizing and build
• Mixed signals after 10 conversations → either pivot your hypothesis or try a different ICP segment
• Nobody cares after 10 conversations → this isn't a real problem. Pick a different idea.

Avoiding Analysis Paralysis

5 conversations reveal 80% of what you need to know. The other 20% you learn by building and shipping. Don't wait for certainty — it never comes.

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Market Sizing (Napkin Math That Matters)

**Tell AI:**

Help me size the market for my SaaS idea:
- Product: [what it does]
- Target customer: [who — job title, company size, industry]
- Problem it solves: [the pain point]

Do a bottom-up calculation:
1. Estimate how many potential buyers exist (use industry data, LinkedIn job title counts)
2. Multiply by a realistic price point for this type of tool
3. Apply a 1-3% capture rate for a new entrant
4. Tell me: does this math support a solo-founder business ($200K-500K ARR)?

Bottom-Up (The Only Method That Matters for Solo Founders)

1. How many potential buyers exist?
   [Industry size] × [% that match your ICP]
   Example: 500,000 US marketing agencies × 12% that are 5-20 person = 60,000

2. What will each pay annually?
   [Price point] × [12 months]
   Example: $49/month × 12 = $588/year

3. Realistic addressable market:
   [Buyers] × [Annual price] × [Capture rate]
   Example: 60,000 × $588 × 2% = $705,600/year achievable

4. Sanity check: Does that number fund the business you want?
   Solo founder needs $200K-$500K ARR to replace income + reinvest.
   If max realistic capture is $100K, the market is too small.

Top-Down (Sanity Check Only)

TAM = Total market revenue (all possible buyers globally)
SAM = Segment you can serve (geography, vertical, size)
SOM = What you can realistically capture in 3 years

Rule of thumb: SOM is 1-5% of SAM for a new entrant.
If SOM doesn't fund your business, stop here.

Volume Estimation Sources

• Government data: Census Bureau, BLS (industry counts)
• Industry reports: IBISWorld, Statista (skim free summaries)
• LinkedIn: Search ICP job titles → count results
• Job boards: Volume of relevant roles = proxy for market size
• Competitor traffic: SimilarWeb free tier → estimate active users
• Subreddits/communities: Member counts = demand signal

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Competitive Analysis

**Tell AI:**

Analyze the competitive landscape for my product:
- My product: [what it does]
- My target customer: [who]
- Known competitors: [list any you know, or "not sure"]

For each competitor, find: pricing, target audience, strengths, weaknesses
(check G2/Capterra reviews for complaints). Then build a 2x2 positioning
matrix showing where I could differentiate.

Substitute Mapping

Every product competes with four types:

1. **Direct competitors** — Same solution, same audience (Basecamp vs. Asana) 2. **