How To Determine Market Size For Your Start Up - The Google Keywords Way, Part 2

In the last post about sizing your Internet start up, I discussed why typical market sizing techniques in consultancy or investment banking don't apply to start ups. A constraints-based technique is likely give you more realistic estimates of your start up's potential market size. This is important in the early stages of your business when you have relatively few channels for selling your product. In order to avoid a cash crunch and failure of your start up, you may want to be sure that your market is going to be big enough to create organic traffic.

I will focus on online markets sizing methods initially, which are relevant to a technology start up. If you're looking to launch your internet start up in an already established market and want vital information on:

• Intensity of competition
• Likely market size
• Effectiveness of strategic partners and marketing channels

then the Google Keyword Tool will be a useful piece of kit in your arsenal.

The Google Keyword Tool tells you the number of searches for a particular term on a monthly basis, for any particular location. It also has a competition measure for pay-per-click (PPC) adverts. The volume and competition measures, when combined, can give you some valuable insights into the potential market size of your start up.

There are caveats you have to bear in mind when using this method for your start up. The web is an ecosystem, with lots of different communities, some closed, some open. Search engines attempt to make all communities much more open and interlinked, by producing results for similar keywords on the same page.

However, a lot of big and important communities that could be vital to your start up are closed off to Google. For example, Facebook has 500 million users, but many people have private profiles which cannot be searched via Google. For communities such as these, Google is less reliable for estimating traffic, but you can still use it for approximations. Why? Because your start up is likely to focus on a couple of main marketing channels initially, of which organic searches and PPC - which the keyword tool covers - are likely to dominate.

The next couple of posts will discuss the use of the Google Keyword Tool for measuring your start up's potential market size.