Reference · Phase 1 — Market Attractiveness & Fact Base
Prioritization & Sizing Frameworks
Load when scoring markets/options; TAM/SAM/SOM; unit economics; funnel sizing.
Part of the Product Strategy skill · loaded on demand from SKILL.md
Part of the product-strategy skill. See SKILL.md for the workflow spine and when to load this file.
II. Prioritization & Sizing Frameworks
A. Multi-Pillar Scoring
Use multi-pillar scoring to compare markets, segments, customer groups, use cases, or product options.
Example Pillars
1. Market Attractiveness
Representative metrics:
- Total addressable market
- Number of potential users or customers
- Revenue pool
- Profit pool
- Growth rate
- Penetration
- Adoption maturity
- Spend or usage volume
2. Customer Engagement & Adoption
Representative metrics:
- Usage frequency
- Usage per active user
- Retention
- Repeat purchase or repeat usage
- Channel mix
- Digital adoption
- Wallet share
- Share of workflow
- Activation rate
3. Competitive / Structural Intensity
Representative metrics:
- Number of competitors
- Incumbent strength
- New entrant traction
- Switching costs
- Customer lock-in
- Distribution access
- Pricing pressure
- Product substitutability
- Regulatory barriers
- Network effects
4. Monetization Potential
Representative metrics:
- Revenue per user
- Take rate
- Subscription potential
- Transaction volume
- Pricing power
- Cross-sell potential
- Gross margin
- Loss, fraud, leakage, or churn
- Cost-to-serve
- Expansion revenue
5. Macro / Outlook
Representative metrics:
- GDP or sector growth
- Employment
- Interest rates or cost of capital
- Consumer or business confidence
- Regulatory change
- Technology adoption
- Infrastructure readiness
- Demographic trends
6. Client Right-to-Win
Representative metrics:
- Existing customer base
- Brand trust
- Distribution reach
- Data advantage
- Product capabilities
- Regulatory permissions
- Partner access
- Operational readiness
- Technology assets
- Cost advantage
Scoring Approach
Scores can be:
- Equal-weighted
- Weighted by strategic importance
- Weighted by confidence level
- Normalized by market size
- Adjusted for feasibility or risk
Example scoring scale:
| Score | Meaning |
|---|---|
| 1 | Very unattractive |
| 2 | Below average |
| 3 | Neutral / mixed |
| 4 | Attractive |
| 5 | Highly attractive |
Outputs
- Per-market or per-segment pillar scores
- Heatmaps
- Rankings
- Weighted aggregate scores
- Priority shortlist
- Sensitivity view
- Confidence rating
B. Top-Down Opportunity Sizing
Use top-down sizing to estimate the order-of-magnitude opportunity.
Basic Formula
Opportunity Value =
Addressable Market
x Eligible Share
x Reachable Share
x Conversion Rate
x Usage / Adoption Rate
x Monetization Rate
x Margin or Take Rate
Common Adjustments
- Conversion
- Cannibalization
- Churn
- Fraud or leakage
- Cost-to-serve
- Regulatory constraints
- Partner fees
- Adoption ramp
- Market penetration cap
- Price compression
Use Cases
Top-down sizing is useful for:
- Comparing markets
- Prioritizing segments
- Sizing revenue pools
- Assessing strategic attractiveness
- Framing the size of prize
Outputs
- TAM / SAM / SOM
- Revenue pool
- Profit pool
- Addressable customer base
- Market sizing waterfall
- Scenario sizing
C. Bottom-Up / Unit Economics Sizing
Use unit economics to test whether the opportunity can be profitable at the customer, account, seat, transaction, or usage level.
Basic Formula
Contribution Profit per Unit =
Revenue per Unit
- Variable Cost per Unit
- Loss / Fraud / Leakage
- Partner Fees
- Servicing Cost
- Incentives
Useful Metrics
- ARPU
- Gross margin
- Contribution margin
- CAC
- CAC payback
- LTV
- LTV:CAC
- Churn
- Retention
- Usage frequency
- Revenue per transaction
- Cost per transaction
- Cost-to-serve
- Break-even volume
- Payback period
Use Cases
Unit economics are useful for:
- Profitability thresholds
- Pricing strategy
- Premium tier design
- Channel economics
- CAC payback
- Partner economics
- Sensitivity testing
D. Funnel-Based Sizing
Use funnel-based sizing when adoption and conversion are critical.
Example Funnel
Addressable Audience
→ Reachable Audience
→ Leads / Prospects
→ Applicants / Sign-ups
→ Approved / Qualified
→ Activated
→ First Use
→ Repeat Use
→ Retained
→ Monetized
Useful Metrics
- Awareness rate
- Click-through rate
- Lead conversion
- Approval rate
- Activation rate
- First-use rate
- Repeat-use rate
- Retention
- Churn
- Upsell conversion
- Referral rate
Outputs
- Funnel model
- Conversion assumptions
- Acquisition forecast
- Revenue ramp
- Bottleneck analysis