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This gives you a concrete, bottom-up way to check whether your niche can actually fund the next stage, instead of guessing. Ulrich (a Wharton professor) walks through a real worked example: count the specific customers in your beachhead, estimate what each one spends, and multiply, so you get a grounded number rather than a top-down fantasy. Run this before you conclude the niche is too small, because a proper count often surprises founders in both directions.
TAM, SAM, SOM, and the Beachhead Market: Estimating Market Size
From ktulrich.com by Karl T. Ulrich Article, approx. 10 minute read
- Size the beachhead by counting actual customers and multiplying by realistic spend per customer, not by taking a slice of a huge headline number.
- A grounded bottom-up figure tells you whether the niche can pay for the next stage, which is the real question behind too small.
- The same method forces you to name your customer, your price, and how you will reach them, which are the assumptions that decide expand or pivot.
