Is my market size estimation correct?


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I made a quick calculation on my market size based on varous articles I found online, and came to the conclusion that my target market (Wordpress development) is a multi-billion dollar a year industry, which surprises me. Is this really possible?

The stats I base my calculations on:

  • 100k new websites go live daily and run on Wordpress
  • 68% are heavily customized (based on 18k surveyed Wordpress users)
  • 4% have some kind of customized admin (which is super time consuming)
  • Wordpress development costs $50/hr on average

The niche I'm going after is not all Wordpress development, but only the admin related (4%).

100.000 (new Wordpress websites) / 100 * 4 = 4.000 heavily customized sites

A heavily customized Wordpress site can hardly be done in less than 80 hours, and mostly it takes much longer, so this would give me:

80*4000*58*365 = $5.840.000.000 spent every year on heavy and unusual Wordpress development.

Could this be possible, or are my calculations somehow flawed?

What other data should I include in my estimation?

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asked Jul 18 '13 at 01:45
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user1721135
182 points
  • This question appears to be off-topic because it is about Wordpress development, not Startups. – Steve Jones 6 years ago
  • You could save this question by shifting the focus to be about researching and analyzing market size and total addressable market. – Casey Software 6 years ago

2 Answers


3

Let's assume this question is about startups and how they can estimate market size.

First- what country (or countries) are you targetting? That's not mentioned. It is unlikely you can handle Arabic and English jobs with equal ease. So what language base will you be using and how does that effect your market size?

Second- what are your sources for your statistics? So you have multiple sources for each number in your 4 assumptions? Do you trust your sources??? Just by looking at one of your numbers- $50/hr for very advanced word press development I can see that this number sounds very low for the US.

Third- What percentage of sites that you are targetting are done in house? You seem to have left that out of the equasion. The more complex the work, the more likely it would be done in house, and not by contractors.

Finally- I see you have not attempted to verify the numbers you are working with by some independent method. If, as you think, advanced word press admin development is a $6 billion a year industry, I would expect to see numerous want ads for this type of programmer. I would also expect to see advertisements from consulting firms offering this type of service. If you don't see ads like this it indicates there is something wrong with your base assupmtions.

To build a startup on assumed market size you need verifyable information.

answered Jul 18 '13 at 07:35
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Gary E
12,510 points
  • My numbers come from the official wordpress survey 2012. One big problem with this is the small and select sample size of the survey, which is only 18k people, mostly wordpress enthusiasts, id guess. I am looking to provide technology, rather then doing development, so the hypothetic product should be applicable for both inhouse and agencies. – user1721135 6 years ago

1

I find 68% figure highly suspect. I suspect self-selection bias i.e. people who answered the survey were very atypical Wordpress users. You pretty much acknowledged this in the comment already.

Another problem is 100k/day figure as it says nothing about how many sites are actually used after, say, a month. The easier creating a new website is (and creating a new WordPress website is very easy), the higher the chance it'll be abandoned.

Another problem is definition of "heavily customized". WordPress has a lot of plugins. Installing a plugin (or multiple plugins) might count as "heavy customization" but it doesn't involve modifying the source code.

Finally, I used to run heavily modified WordPress site for my blog but I did the modifications myself. I didn't pay for it. So that's another reduction: how many people paid for those customizations and how many made them themselves?

answered Jul 18 '13 at 10:37
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Krzysztof Kowalczyk
1,950 points
  • 68% seems to be off as you say. What I dont quite get is the 100k / day figure, which is based on the 140k downloads of wordpress daily. But is it even possible that the internet grows by 100k websites on wordpress daily? I think that could be a majour flaw in my stats, gotta investigate the this further. – user1721135 6 years ago

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