How Do We Come Up With our Figures?
ARtillry Intelligence publishes several reports based on market-sizing and revenue projections. But an important question is how do we come up with these figures?
It’s important to specify this, because there’s such variance across industry projections due to differences in methodology, and what’s being tracked. In a world where industry watchers get a reputation for “calling it in,” it’s also important to disclose methodologies to demonstrate the diligence applied to market sizing.
Market Sizing and Forecasting Methodology
ARtillry Intelligence follows disciplined best practices in market sizing and forecasting, developed and reinforced through its principles’ 15 years in research and intelligence in the tech sector. This includes the past two years covering AR & VR as a main focus.
Each market-sizing or forecasting deliverable is different in its composition and inclusions/exclusions, which are specified in each case (example). Generally speaking, Artillry Intelligence practices a combination of the top-down and bottom-up forecasting methodologies.
Bottom-Up: The bottom-up forecasting methodology requires building financial models that reflect the dynamics and unit economics of sectors being measured. This includes variables like unit sales, pricing trends, individual company performances, and several other micro factors that ARtillry Intelligence tracks. Because there are often sub-sectors that comprise an overall industry (e.g. enterprise and consumer AR), the bottom-up method requires unique models that align with the unit economics and revenue drivers of each.
Top-Down: The top-down methodology takes a more macro approach. It looks at influential market factors that inform industry revenue growth and trajectory. This can include aggregate sales and comparable/historic industry growth rates accross the sub-sectors that ARtillry Intelligence tracks. This approach generally works best in markets where a few large (and often publicly-traded) companies hold large market shares.
Together, confidence is achieved by triangulating market size in a disciplined way. It all comes together in a forecast model with several spreadsheet tabs and thousands of active cells. More about ARtillry Intelligence principles’ market-sizing history and credentials can be seen here.
Video Companion: How Do We Come Up With Our Figures?
Disclosure and Ethics Statement
ARtillry Intelligence has no financial stake in the companies mentioned in its reports, nor is it commissioned by industry players to produce them. With respect to market sizing, ARtillry remains independent of players and practitioners in the sectors it covers. It doesn’t perform paid services or consulting for such companies, thus mitigating bias — real or perceived — in market sizing and industry revenue projections. Disclosure and ethics policy can be seen in full here.