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Step 8: Input your serviceable obtainable market

Choosing planned or potential impact & determining the serviceable obtainable market size.

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In this step you determine the segment of the market that a solution will displace, the serviceable obtainable market (SOM). This is the portion of the SAM that a specific solution can realistically serve, based on its value proposition, sales effort, and market readiness. This can be calculated from the bottom-up (company projection, based on forecasted unit sales) to determine a planned impact or from the top-down (technology projection, based on market penetration) to determine a potential impact.

Toggle the switch between “Company Projection” and “Technology Projection” to navigate between the two impact assessment methods.

On this page, you will find:

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Planned impact (company projection)⁠

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Potential impact (technology projection)⁠

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Learn more about the SOM to calculate

planned impact⁠

and

potential impact⁠

from Project Frame.

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Don’t forget to save!

Your progress in the tool does not save automatically. If you are not finished inputting data for your tool, click through to the end and save the solution to your solutions. You can then go back and open the model in “My Solutions” and edit the inputs later.

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To calculate planned impact (company projection)

This section does not have any CRANE tool defaults because it requires specific insights into a company’s planned sales. You must input a sales forecast in the appropriate unit for the specified time period of the assessment. This approach is considered a bottom-up approach from a company level, as the impact is calculated by multiplying the unit impact with the sales forecasted over the time period specified in Step 3.

For example:

If you are modeling cultured meat, create a spreadsheet with planned meat sales in Mt (chosen in Step 3) per year.

If you are modeling energy storage, create a spreadsheet with the company’s planned total deployed MWh (chosen in Step 3) per year.

Note that Project Frame recommends planned impact assessments are conducted on 5-10 year timelines, evaluations of impact > 10 years are more appropriate as potential impact assessments to reflect the inherent uncertainty in any one company’s impact on long time horizons.

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To calculate potential impact (technology projection)

The potential impact is calculated using a top-down approach, where the SOM for the technology is derived as a portion of the SAM and the annual volume is multiplied by the unit impact.

As new technologies successfully enter the market, they will capture a portion of the SAM. Determining the portion that will be captured in the future depends on a number of factors including: potential customer awareness, distribution channels, TRL, and competition from established players and incumbent solutions. Using a function commonly referred to as a S-curve is a typical approach to estimating a SOM. The shape of this curve can be modified based on analyst intuitions and knowledge of the technology. The dynamics of market uptake are captured by a technology diffusion or S-curve and highlight that it may be years before actual sales begin to approach the SOM.

The CRANE tool provides 3 generic diffusion templates where you can model different speeds of market uptake: standard, accelerated or slower. These are arbitrary speeds that simply vary the parameters of the S-curve and are not specific to any individual technology or historic trends. You may wish to enter you own S-curve parameters, in which case you can select a “custom” diffusion template and modify the saturation, takeover time and hypergrowth time.

You can read more about the S-Curve, market adoption and technology diffusion in the

Project Frame Methodology guidance⁠

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Uncertainty

The CRANE tool automatically assumes a standard uncertainty of 25%, this will be used to bound the results. You can modify this based on your understanding of the technology and input data. For the SOM the uncertainty is dependent on factors such as:

Sales forecast certainty and historic data. You may have insights into the number of customers or potential customers for their solution. With information on the number of contracts that have been signed, insights into the current market trends, etc. you may have more or less uncertainty in a forecast than 25%.

Technology uptake contingencies. The successful deployment of a new technology may rely upon policy changes, breakthroughs in scaling, changes in consumer attitudes, etc. These uncertainties can be used to guide bound the results to a more conservative and more ambitious potential impact.

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FAQs

Should I calculate the planned or potential impact?

Project Frame recommends calculating the planned impact for a 5-10 year time horizon and the potential impact for a time horizon greater than 10 years. This means that planned impact would be more useful for short term forecasting of the impact of a technology solution based on the company’s sales forecast. The potential impact is more useful for longer term forecasting for the total impact of a technology solution based on market penetration and gives an idea of the potential impact of that solution. The former is seen as a bottom-up approach, which would be more realistic due to the shorter term, and the latter as a top-down approach, which would be more speculative due to the longer term.

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To calculate planned impact (company projection)