In this blog, you will learn how to find your market and measure its size so you can have a clear and broader understanding before starting a business.
I have read multiple books, more than 100 essays, and watched many videos to gather enough knowledge to summarize this topic in a simple way for you. One book I would like to mention is $100M Offers by Alex Hormozi. According to my knowledge and experience, it is one of the best books on this topic. I especially liked the CARTA market size model explained in the book.
However, I have simplified these concepts for you so that you can focus on building your business instead of spending time researching everything from scratch.
So, let’s get started.
What is the market ?
so, what is the market? At its core, market size refers to the total number of potential buyers for your product or service, and the total possible revenue those buyers could generate.
SO HOW YOU PICK THE RIGHT MARKET?
In order to pick a market, you need to find a starving crowd. This means a group of people who really want a product or service but cannot easily find it. These are markets where companies are failing to serve people properly. Customers want the product or service, but they cannot find a good solution. Small companies may not be willing to take the risk, and big companies may not be tapping into that market. When you find a group of people who clearly want something but are not being served well, that is often a strong market to enter.
For that, we will take the concept from Alex Hormozi’s book 100 Million Dollar Offers. In his book, he explains the steps to picking the right market:
- The lever of success
- Four key variables to consider when choosing a market
- The three main types of markets
- And his famous rule: the real riches are in the niches
I took this concept because, while I was researching the best ways to pick a market, I realized that a lot of people would also agree with me this is one of the best concepts to follow.
1. Three levers of market
Markets > Offers > Persuasion
Markets
Start by looking for a market where people really need something they’re actively searching for a solution and can’t wait to get it. If you can find that, you’re in a strong position because the demand is already there. You don’t need to overthink it; just focus on serving those people.
Offers
If there isn’t an obvious high-demand market, you need to create an offer that’s hard to refuse. It should be so compelling that people feel like they’re missing out if they don’t take it. Even in ordinary markets, a smart and well-designed offer can make a big difference.
Persuasion
When your market and offer are solid, success often comes down to persistence. Many others may be offering similar things, so the person who stays consistent, keeps improving, and keeps showing up is usually the one who wins over time.
Key Advice
Avoid markets that are shrinking or dying. Focus your energy where there’s real potential for growth.
2. Four variables of market
- Pain
- Purchasing power
- Easy to target
- Growing market
How to Choose the Right Market
- People in Pain
Pick a market where people are really struggling and need your product or service. If the pain is strong, they will come to you. - Purchasing Power
It’s not enough that people want what you offer they must also be able to pay for it. You’re running a business, not a charity. Make sure your customers can actually afford your product or service. - Easy to Target
The people you’re targeting should be easy to reach. Can you find them regularly online, on social media, or in real life? This is important because you need to know your audience well, and we’ll go deeper into that later. - Growing Market
Avoid dying markets. No matter how good your product or offer is, it’s hard to succeed in a shrinking market. Focus on markets that are growing. Many entrepreneurs fail because they enter industries that are declining so make growth your priority.
3. three main market
lmost every product or service falls into one of three main markets: health, wealth, or relationships.
Health : Anything that helps people feel better, live longer, or improve their physical or mental wellbeing. Wealth : Products or services that help people make more money, save, invest, or grow financially. Relationships : Anything that improves connections with family, friends, colleagues, customers, or society in general.
When you’re building a business, think about which of these three your idea fits into. Are you helping people get healthier? Helping them earn or manage more money? Or helping them improve their relationships? This simple framework makes it easier to see the real value you’re creating.
4. Riches Are in the Niches
The more you narrow down your target customer, the more value you can provide and the more you can charge. If your offer is too general and your target is “everyone,” the chances of getting real results are low. People need to feel like you’re speaking directly to them.
We’ll go deeper into how to narrow down your audience in a future lesson. For now, just remember: the smaller and more specific your niche, the bigger your opportunity.
Now we have the markets we need to know what our market size is. Market size is one of the important thing we need to know because you are creating a business which is gonna last for years and you gonna put lot of your effort and money you need to know if work hard how far you can go with this business
Why do we need to know market size ?
- Understand the Business Opportunity
- Estimate How Far the Business Can Grow
- Predict Revenue and Profit Potential
- Attract Investors
- Decide If the Business Is Worth Starting
- Plan Your Strategy
- Understand Competition
- Pricing and Positioning
How to measure your market size?
In order to measure your market size we will use formula TAM, SAM, SOM , AND WE will talk about the top down approcee and button to top
What is TAM?
TAM means total addressable markets, TAM is the total revenue opportunity available if you grab 100% markets in your industry or nicehes or other word we can say that mauxmum size you of your total market before you create th epin point avatar We can take an exome like Example:
If you build an AI agent for customer relationship management, your TAM (Total Addressable Market) is all companies that need customer support or customer communication automation.
For example, there may be 10 million companies worldwide that use customer support systems. If your AI agent costs $100 per month, then:
10,000,000 companies × $100 × 12 months = $12 billion TAM per year.
This means the total possible market for your product is $12 billion annually if every potential customer used your solution.
What is SAM ?
SAM means that serviceable addressable market, this is means that total market of you business you can serve not you assume that realistically, with SAM uou will be able to have clear idea about you avatar and how many people you sell your product and service
If you build an AI agent for customer relationship management, your SAM is the portion of the TAM that your product can actually serve.
For example, out of 10 million companies worldwide, maybe only 2 million companies use online CRM systems that can integrate with your AI agent.
If your AI agent costs $100 per month:
2,000,000 companies × $100 × 12 months = $2.4 billion SAM per year.
This means the realistic market your product can target with its current technology is $2.4 billion annually
What is the SOM ?
SOM means serviceable obtainable market, in SOM you portion of SAM you realistically able to serve it deepens your capability management , funding , skills , geography and so on
For example, from the 2 million companies in your SAM, maybe you can realistically reach 20,000 companies in the beginning through marketing, sales, and partnerships.
If your AI agent costs $100 per month:
20,000 companies × $100 × 12 months = $24 million SOM per year.
This means the realistic revenue you could capture in the early stage is about $24 million annually.
Conclusion
Finding the right market and understanding its size is one of the most important steps before starting any business. Without this foundation, even the best product or service can fail.
To recap what we covered:
When picking a market, focus on finding a starving crowd — people who are in pain, have purchasing power, are easy to target, and exist in a growing industry. Remember that almost every business falls into one of three core markets: health, wealth, or relationships. And the more specific your niche, the greater your opportunity.
When measuring your market, use the TAM, SAM, SOM framework to get a realistic picture of your opportunity — from the total possible market, down to what you can realistically capture in the early stages of your business.
This knowledge gives you clarity, helps you avoid wasting time and money on the wrong markets, and puts you in a much stronger position to build something that lasts.
The goal is not to chase the biggest market — it’s to find the right one for you, where real demand exists, and where you can genuinely serve people better than anyone else.
Now that you understand how to find and measure your market, you’re ready to take the next step: defining your ideal customer.
