What is Market Sizing?
Market sizing is a case interview question type where you estimate the size of a market or a specific quantity using logical assumptions and structured calculations. Examples include "How big is the market for pet food in the US?" or "How many golf balls fit in a school bus?" Market sizing questions appear in 20-30% of consulting interviews and test your ability to structure ambiguous problems.
| Also known as | Guesstimate, estimation question, Fermi problem |
| Frequency in interviews | 20-30% of case interviews |
| Time given | 5-15 minutes (standalone) or embedded in larger case |
| Accuracy expected | Within 2-3x of actual (structure matters more) |
| Key approaches | Top-down, Bottom-up |
Definition
Market sizing tests your ability to take an ambiguous question with no obvious answer and arrive at a reasonable estimate through structured thinking. You're not expected to know the answer - you're expected to build a logical path to a defensible estimate.
The name "Fermi problem" comes from physicist Enrico Fermi, who was famous for making accurate estimates with limited information (he estimated the yield of the first nuclear bomb by observing how far paper scraps blew).
In consulting, market sizing is practical: clients often need to know market size before entering, and precise data may not exist. Your ability to estimate intelligently is directly applicable to real work.
Two Approaches: Top-Down vs. Bottom-Up
Top-Down
Start with a large known number and narrow down through filters.
Example: "US pet food market" → US population (330M) → Households (130M) → % with pets (67%) → Average spend ($500/yr) = $43B market
Bottom-Up
Start with individual units and build up to the total.
Example: "Piano tuners in Chicago" → Pianos per 100 households (5) × Chicago households (1M) × Tunings/year (1) ÷ Tunings per tuner per day (4) ÷ Working days (250) = ~50 tuners
When to use which: Top-down works best for market size questions ("How big is X?"). Bottom-up works best for counting questions ("How many X are there?"). In interviews, stating your approach upfront shows structure.
Worked Example: Coffee Cups in NYC
Question: "How many cups of coffee are sold in New York City each day?"
Approach: Top-down from population
- • NYC population: ~8 million residents + ~3 million daily commuters = 11M people
- • % who drink coffee: ~65% of adults, so ~7M coffee drinkers
- • Cups per drinker per day: ~1.5 on average (some have 2-3, some have 0-1)
- • % bought (vs. made at home): ~40%
Calculation: 7M × 1.5 × 0.4 = 4.2 million cups/day
Sanity check: NYC has ~3,000 coffee shops. At 4.2M cups, that's ~1,400 cups per shop per day, or ~100/hour over 14 hours. Seems reasonable for busy shops with additional sales from delis, carts, etc.
Common Market Sizing Mistakes
| Mistake | Fix |
|---|---|
| Diving into numbers without structuring | State your approach first, then calculate |
| Unreasonable assumptions | Sanity-check each assumption out loud |
| Math errors under pressure | Round numbers, narrate calculations |
| Not segmenting when helpful | Consider splitting by geography, age, etc. |
| Forgetting units | State units with every number |
Related Concepts
- Market Sizing Guide - In-depth strategies and practice problems
- Case Interview - The interview format where market sizing appears
- Mental Math - The calculation skills needed for market sizing
Frequently Asked Questions
What is market sizing in a case interview?
Market sizing is estimating the size of a market or quantity using logical assumptions. You break down the problem, make reasonable assumptions, and calculate an answer. The structure matters more than the exact number.
How accurate does my answer need to be?
Within 2-3x of the actual number is typically acceptable. Interviewers care more about your reasoning process than the final answer. A well-structured answer that's 50% off beats a lucky guess.
How do I practice market sizing?
Estimate everyday things: cups of coffee sold in your city, flights from a nearby airport, number of gas stations in your state. Then look up the real answer to calibrate. Use structured practice drills for interview-style problems.
Practice Market Sizing
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Start PracticingLast updated: January 15, 2026