Customer Demand Modelling

This is an easy one, but something I come across all the time.

The entrepreneur that says 'well if we get 1% of the market share this thing will be worth..........' - I am sure you know how it goes.

In building a demand estimate one cannot do enough grass roots research. Building the customer demand proposition from the ground up. An obvious problem with the 'Top Down' approach, besides being lazy, is that as soon as a question is asked at any depth it can lead to those awkward moments because the business promoter has not really thought about it all that much.

Please don't be lured by the false hope that the educated will subscribe to the percentage of market approach. They won't.

Do as much research as you can, including conducting simple surveys of your target customer group. Nothing presents more compellingly than being able to say that you have proprietary research to back your demand estimates / financial model. And that proprietary research can be done quite simply, be that interview, mailouts, telephone canvassing, etc. By doing this grass roots work you will also give yourself the opportunity to really think independently if what you are getting up to is in fact going to be the next big thing - or whether you are simply kidding yourself (don't worry we all do) and your really valuable time is better spent somewhere else.