Contents

Hypothesis Test

Key hypothesis to validate: the defined market is attractive [customer / geography / offering / vertical stage]

• The addressable market is large [validated through market sizing]
• The market is growing (driven by positive key trends) [validated growth rate and trend analysis]
• The market is accessible [understanding barriers to entry]
• The business environment is favourable [validated through PESTLE analysis]

What does good look like?

The "size of the prize" is large enough to be worth pursuing with a clearly defined FMS > SOM > SAM > TAM pathway to the targeted revenue run-rate based on different market segments (size, region, industry etc.)

The size of the prize is determined based on how much revenue the business can generate:

• $10m = acquisition target
• $100m = on the verge of an IPO
• $1,000m = eminent public company

Questions to validate the hypothesis

• How are in-scope markets defined? What are the relevant market segments?
• How big is the market (in value and volume)?