5 mental models that make market sizing effortless

Why mental models beat memorisation

Market sizing questions aren't about knowing the right answer — they're about demonstrating structured thinking under pressure. The best candidates don't memorise numbers; they apply mental models.

1. The population pyramid

Start with the total population, segment by age, and filter by relevant demographics. This works for any question about consumer behaviour — from coffee consumption to streaming subscriptions.

2. The demand-side breakdown

Estimate total demand by multiplying number of users × frequency of use × average transaction value. Each component can be cross-checked with common-sense benchmarks.

3. The supply-side constraint

Sometimes it's easier to estimate supply. How many hotels are in a city? How many tables per hotel? How many seatings per night? This top-down approach is fast and defensible.

4. The ratio anchor

Anchor your estimate to a known statistic. If you know the US market size, estimate the UK as roughly 1/5 of the US (adjusting for population and GDP per capita differences).

5. The sanity check

Always validate your final number with a gut check. Does the per-capita figure make sense? Would this imply an unreasonable number of transactions per person per year?