The Market You Think You’re in Probably Doesn’t Exist

5 Market Strategy Mistakes I Made as a CEO — and How I Help Others Avoid Them. Part 1

As we continue this series on strategic thinking, your thoughtful responses inspired me to tackle these mistakes. That’s how this five-part sub-series was born. Each post stands on its own—you don’t need to read them in order.

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Measuring market size in dollars is like measuring emotions with a thermometer.

In 1980, AT&T asked McKinsey to estimate how many cell phones would be in use worldwide by 2000.

McKinsey noted all the problems:

• the handsets were the size of a brick and just as heavy

• the batteries kept running out

• the coverage was patchy

• the price per minute was sky-high

So, the firm concluded that the total market would be about 900,000. In monetary terms, the future market seemed tiny for a giant like AT&T.

Making market predictions is a risky business. Even large, reputable institutions make completely off-the-mark mistakes.

But that’s just part of the problem. We make five critical missteps when assessing the market for strategic purposes.

Today we'll focus on the first pitfall – the m…