Market Sizing / Estimation

What interviewers evaluate

• Do you state assumptions explicitly and reason top-down or bottom-up?
• Do you decompose the problem into estimable pieces?
• Are your intermediate numbers reasonable and sanity-checked?
• Do you arrive at an answer and discuss what would change it?

A framework to structure your answer

1. Clarify - define the item and scope (geography, timeframe, what counts).
2. Pick an approach - top-down (start from a big population and narrow) or bottom-up (build from units of activity).
3. Decompose - break into factors you can estimate (population × adoption × frequency).
4. Estimate each factor - state each assumption out loud with a round, defensible number.
5. Compute & sanity-check - multiply, then sense-check against something you know.

Try structuring your own answer first, then reveal a strong worked example.

Common variants

• How much storage does YouTube need per day?
• How many pizzas are sold in the US per year?
• Estimate the number of queries Google handles per second.

Pitfalls to avoid

• Not stating assumptions, so the reasoning can't be followed or corrected.
• Reaching for a precise-looking number with no decomposition.
• Using wildly off base numbers and not sanity-checking.
• Getting lost in arithmetic instead of structure (round aggressively).
• Forgetting to give a final answer and a range.

Likely follow-ups

• Which assumption is your answer most sensitive to?
• How would the number change for a weekend?
• How would you validate this with real data?