What is Market Opportunity Sizing?

Market Opportunity Sizing is a systematic methodology for quantifying the revenue potential of a market based on customer jobs and unmet needs. Unlike traditional market sizing approaches that typically multiply the number of potential customers by average selling prices of existing products, a Jobs To Be Done approach defines markets by the customer's job-to-be-done and sizes them based on customers' willingness to pay to get their job done better.

This methodology creates a more accurate assessment of market potential by focusing on the underlying customer goals rather than current product categories. By identifying how many customers struggle with specific job steps and how much they would pay for better solutions, companies can discover opportunities that traditional market sizing methods often miss entirely.

Why is Market Opportunity Sizing important?

Traditional market sizing approaches often lead to strategic missteps for several key reasons:

1. Missed disruptive opportunities

Product-based market definitions can blind companies to emerging opportunities where new approaches satisfy customer jobs better than existing product categories.

2. Underestimated market potential

By focusing only on current products and their prices, traditional methods often underestimate customers' willingness to pay for significantly better job satisfaction.

3. Misallocated resources

Without understanding which segments struggle most with which job steps, companies can't effectively allocate resources to the highest-value opportunities.

4. False precision

Traditional methods often create detailed market size projections based on weak assumptions, leading to overconfidence in flawed estimates.

5. Static analysis

Product-based sizing fails to account for how markets evolve as new solutions satisfy customer jobs better, leading to outdated market views.

What are the key components of effective Market Opportunity Sizing?

A comprehensive Jobs To Be Done approach to Market Opportunity Sizing includes these key components:

1. Job-Based Market Definition

The foundation of accurate sizing is defining the market by customer jobs:

• The overall job customers are trying to accomplish
• The scope and boundaries of this job
• The primary job beneficiaries, executors, and purchase decision makers
• The relationship between this job and adjacent jobs
• The stability of this job over time

This job-based definition establishes the fundamental market to be sized.

2. Job Step and Need Mapping

A detailed breakdown of the customer's job:

• The sequence of steps customers take to execute the job
• The specific needs within each job step
• The importance of different steps and needs to customers
• The current satisfaction levels for each need
• The opportunity scores identifying underserved needs

This mapping identifies where specific market opportunities exist within the overall job.

3. Customer Segmentation

Division of the market into meaningful segments:

• Segments based on patterns of struggle with job steps
• Demographic or firmographic characteristics of each segment
• Size and growth rates of different segments
• Current solution usage across segments
• Willingness to pay within each segment

This segmentation ensures market sizing reflects different customer groups' specific needs and values.

4. Willingness to Pay Assessment

Measurement of customer value perception:

• Current cost to execute the job with existing solutions
• Economic impact of improved job execution
• Stated willingness to pay for better solutions
• Price sensitivity across different segments
• Value perception for different levels of job satisfaction improvement

This assessment determines the revenue potential beyond current product pricing.

5. Securable Market Calculation

Quantification of the realistic revenue opportunity:

• Total market size based on willingness to pay
• Addressable portion based on geographic and segment focus
• Serviceable portion based on company capabilities
• Obtainable portion based on competitive position

Timeline for market capture

This calculation provides a realistic view of the revenue opportunity a company can secure.

How do you implement effective Market Opportunity Sizing?

1. Define the market through customer jobs

Start by establishing the job-based market boundaries:

• Conduct research to understand what job customers are trying to accomplish
• Define the job at the right level of specificity (neither too broad nor too narrow)
• Validate the job definition with diverse customers
• Map the relationship between this job and adjacent jobs
• Establish criteria for inclusion/exclusion in the market

This definition creates clear boundaries for your sizing exercise.

2. Map the job steps and needs

Develop a comprehensive understanding of the customer job:

• Break down the job into sequential steps
• Identify specific needs within each step
• Measure the importance of each need to customers
• Assess current satisfaction with existing solutions
• Calculate opportunity scores to identify underserved needs

This detailed job map reveals where specific market opportunities exist.

3. Segment the market by customer needs

Identify meaningful customer segments:

• Analyze patterns of struggle across the job
• Group customers with similar need profiles
• Verify segment differences through quantitative research
• Determine segment sizes using market research
• Assess segment attractiveness based on struggle and willingness to pay

This segmentation ensures market sizing reflects the diverse needs of different customer groups.

4. Measure willingness to pay

Assess the value customers place on better job satisfaction:

• Survey customers on willingness to pay for job execution improvements
• Analyze the economic impact of better job execution
• Compare willingness to pay across segments
• Validate stated willingness through indirect questioning
• Develop price sensitivity curves for different levels of improvement

This value assessment determines the revenue potential beyond current product pricing.

5. Calculate market size across segments

Quantify the total market opportunity:

• Multiply segment sizes by willingness to pay
• Adjust for geographic or access limitations
• Create probability-weighted scenarios for different assumptions
• Develop adoption timelines for realistic revenue forecasting
• Compare calculations to traditional market size estimates as a sanity check

This quantification provides a comprehensive view of the market opportunity.

6. Determine the securable portion

Assess the realistic portion your company can capture:

• Analyze competitive positions in different segments
• Evaluate your capabilities to address key job steps
• Assess go-to-market reach across segments
• Consider regulatory or other market access limitations
• Develop resource requirements for different levels of capture

This assessment translates total opportunity into actionable business potential.

What frameworks help with Market Opportunity Sizing?

The Need Curve Framework

This framework visualizes customer willingness to pay:

• Horizontal axis represents number of customers
• Vertical axis represents willingness to pay to get the job done
• Curve shows distribution of customers by price point
• Area under the curve represents total market value
• Segments can be highlighted on different portions of the curve

This visualization helps companies understand market value distribution and target appropriate segments.

The Opportunity Algorithm

This calculation identifies which needs represent the greatest opportunities:

Opportunity = Importance + (Importance - Satisfaction)

Where:

• Importance is rated on a scale (typically 1-10)
• Satisfaction is rated on the same scale
• Scores above 15 (on a 10-point scale) indicate significant opportunities

This algorithm helps prioritize which needs to address in market sizing.

The Total Addressable Market (TAM) Cascade

This framework breaks down market potential into realistic layers:

• Total Market: All customers trying to get the job done worldwide
• Addressable Market: Portion reachable through company's geography and channels
• Serviceable Market: Portion the company can effectively serve with its capabilities
• Obtainable Market: Realistic share attainable given competitive position

This cascade helps companies communicate realistic market potential to stakeholders.

The Segment Opportunity Matrix

This framework maps opportunity size across segments:

• Rows represent customer segments
• Columns represent job steps or needs
• Cells contain opportunity scores for each segment-need combination
• Color coding highlights high-opportunity areas
• Size indicators show segment revenue potential

This matrix helps companies identify which segments offer the greatest market potential.

The Growth Vector Assessment

This framework evaluates different paths to market expansion:

• Core Market Penetration: Deeper penetration in current segments
• Job Step Expansion: Addressing more steps in the customer job
• Segment Expansion: Targeting additional customer segments
• Geographic Expansion: Entering new geographic markets
• Adjacent Job Expansion: Addressing related customer jobs
• This assessment helps companies plan strategic market growth beyond initial sizing.

What are common challenges in Market Opportunity Sizing?

Overreliance on existing product categories

Many sizing exercises simply extrapolate from current product markets, missing opportunities for new approaches that better satisfy customer jobs. Maintaining focus on the underlying job rather than current solutions is essential.

Confirmation bias

Teams often unconsciously adjust assumptions to support desired sizing outcomes. Using multiple methodologies and external validation helps overcome this bias.

Data availability limitations

Detailed data on job execution and willingness to pay can be difficult to obtain. Custom research and triangulation from multiple sources may be necessary.

Static analysis

Markets are dynamic, with evolving customer expectations and competitive solutions. Effective sizing should include scenario planning for different market evolution paths.

Failure to account for non-consumption

Many markets include customers who currently don't use any formal solution, making them invisible in product-based sizing. Job-based approaches better capture these potential customers.

How do you use Market Opportunity Sizing insights?

1. Guide strategic investment decisions

Use sizing insights to inform key strategic choices:

• Which customer segments to target first
• How much to invest in product development
• Which geographic markets to prioritize
• What pricing strategies to employ
• Whether to build, buy, or partner for key capabilities

These investment decisions directly impact the company's ability to capture the sized opportunity.

2. Develop targeted product roadmaps

Translate opportunity sizing into development priorities:

• Focus on job steps with the highest revenue potential
• Sequence development to address highest-value needs first
• Allocate resources proportional to opportunity size
• Design solutions calibrated to segment willingness to pay
• Balance short-term capture with long-term market development

These roadmap priorities ensure development resources are aligned with market potential.

3. Create segment-specific go-to-market strategies

Develop approaches tailored to high-value segments:

• Design marketing messages that resonate with segment-specific struggles
• Create pricing models aligned with segment willingness to pay
• Build sales processes focused on high-potential customers
• Develop channel strategies that efficiently reach target segments
• Craft onboarding experiences that quickly demonstrate value

These targeted strategies maximize conversion in high-value segments.

4. Set realistic growth expectations

Use sizing to establish appropriate performance targets:

• Develop phased revenue projections based on adoption patterns
• Set market share goals grounded in segment analysis
• Create customer acquisition targets by segment
• Establish pricing expectations based on willingness to pay
• Define metrics to track progress against opportunity capture

These expectations ensure alignment between market opportunity and business planning.

5. Communicate value to stakeholders

Leverage sizing insights in stakeholder discussions:

• Articulate market potential to investors and boards
• Help internal teams understand target customer value
• Support partner discussions with clear opportunity articulation
• Guide recruitment by demonstrating growth potential
• Inform analyst and market communications

These communications build support for strategic initiatives based on market sizing.

How do you measure the accuracy and value of Market Opportunity Sizing?

Predictive Accuracy Metrics

These measure how well sizing predicts actual market development:

• Revenue realization - How actual revenue compares to sizing predictions
• Segment growth alignment - How well segment growth matches projections
• Willingness to pay validation - How actual pricing compares to predicted willingness
• Adoption rate accuracy - How well customer adoption timing matches forecasts
• Competitive evolution - How accurately the sizing predicted competitive responses

These metrics help refine sizing methodologies over time.

Strategic Impact Metrics

These measure how sizing influences strategic decisions:

• Investment alignment - Degree to which investments follow opportunity sizing
• Roadmap influence - How strongly sizing shapes product roadmaps
• Go-to-market adjustment - Changes in market approach based on sizing insights
• Resource allocation - How resource distribution reflects opportunity sizing
• Partnership focus - Alignment of partnerships with sized opportunities

These metrics reveal whether opportunity sizing genuinely drives strategy.

Comparative Advantage Metrics

These measure how sizing creates advantages over competitors:

• Market surprise discovery - Identification of opportunities competitors miss
• Segment leadership - Early establishment in high-value segments
• Pricing optimization - Superior alignment of pricing with customer value
• Development efficiency - Better return on development investment
• Capture speed - Faster realization of market potential

These metrics show whether sizing creates competitive advantage.

Methodology Improvement Metrics

These measure the evolution of sizing capabilities:

• Assumption refinement - How assumptions improve with market experience
• Methodology enhancement - Evolution of sizing approaches over time
• Data quality improvement - Better information sources and validation methods
• Team capability development - Growing organizational skill in opportunity sizing
• Integration with planning - Deeper connection between sizing and business processes

These metrics help organizations build stronger sizing capabilities.

How does Market Opportunity Sizing differ from traditional approaches?

Versus Product-Based TAM Calculations

Traditional TAM calculations multiply the current number of product users by average selling prices. Jobs To Be Done sizing considers all customers trying to accomplish the job and their willingness to pay for better solutions, often revealing much larger opportunities.

Versus Industry Analyst Reports

Analyst reports typically define markets by established product categories and focus on current spend. Jobs To Be Done sizing identifies markets based on customer goals and includes potential spend for significantly better solutions, providing forward-looking perspectives.

Versus Financial Market Models

Financial models often extrapolate historical growth rates for existing markets. Jobs To Be Done sizing identifies untapped potential based on unmet customer needs, revealing growth opportunities that historical trends might miss.

Versus Competitor-Based Sizing

Sizing based on competitor revenues assumes the market is limited to current offerings. Jobs To Be Done sizing identifies underserved needs that could expand the market significantly with better solutions.

Versus Top-Down Demographic Approaches

Demographic approaches size markets based on population characteristics. thrv focuses on how many customers struggle with specific job steps and how much they would pay for better solutions, creating more actionable insights.

How thrv helps with Market Opportunity Sizing

thrv provides specialized methodologies and tools to help companies implement effective Market Opportunity Sizing based on customer jobs and unmet needs. The thrv platform enables teams to map customer jobs, identify high-opportunity needs, segment customers based on struggle patterns, measure willingness to pay, calculate realistic market opportunities, and develop strategies to capture high-value segments.

For organizations struggling with market definition, opportunity prioritization, or strategic focus, thrv's approach to Market Opportunity Sizing provides a clear path to identifying and capturing the most valuable growth opportunities based on a deeper understanding of customer jobs and needs. The result is more focused innovation, better resource allocation, and stronger growth—all derived from understanding markets through the lens of customer jobs rather than product categories.