'Big enough' depends on what you want. A good business that pays two founders well and a company that could raise venture capital are both valid goals, but they need different sizes of market. Decide which one you're building first.
Count from the bottom up
Skip the 'if we get 1% of a billion-euro market' slide. Instead, count real customers and real prices.
- 1Who exactly buys?Define one type of customer you can find and reach, for example accounting firms with 5–50 employees in Germany.
- 2How many are there?Use public statistics, industry associations or business registers to get a rough count.
- 3What would they pay per year?Base it on what they pay for today's alternative.
- 4MultiplyNumber of customers × yearly price = the market you can actually reach. Then list the next two customer groups you could expand into.
Example: 12,000 target firms × 600 € a year = 7.2 million € a year if you won all of them. Winning 5% is 360,000 € a year, a nice business. To interest venture investors, you'd need a believable path to much larger groups of customers.
Questions to ask yourself
- Is the market growing, or shrinking?
- Could the first group of customers lead naturally to a much bigger group?
- Why can this be built now and not five years ago (new technology, new rule, changed habit)?
- If you win, what stops a big company from copying you?
- Would you still want to work on this in five years?
Small can be smart
Many large companies started in a niche that looked too small: one city, one type of user, one use case. A small market you can own is better than a big one where nobody notices you. What matters is that the niche is a doorway, not a dead end.