One of the most commonly asked questions in Consulting Case Interviews are Market Sizing and Guesstimate. Read Market Sizing & Guesstimate 101 article if you need some basic knowledge. But let’s get right into it, what are somesimple tips and tricks that significantly boost up your performance?
1 – Spend a little time for CLARIFICATIONS at the beginning
In most Market-sizing and Guesstimate questions, there are always unclear areas. You should develop a habit of always starting off with clarification questions. Not only it helps clear out gray areas but also helps you score points in the overall interview. Even if these gray areas turn out to be ok, the interviewer will like you, just by having those clarifications in your approach.
2 – Breaking down the big problem into MANAGEABLE pieces
You probably know that the key to answer these questions is to break them into smaller pieces. However, you should be smart in how you do that. Mis-breaking down problems may kill yourselves with the complexity. Normally, only 1 or 2 layers down from the original question is fine. The components must be easier to estimate than the original question.
3 – Suggest EASE-to-calculate numbers in your assumptions
Similar to the above, no need to kill yourselves by coming up with difficult numbers. Just suggest simple, round numbers to the interviewer and most of the time he / she will be ok with it.
For example: If there is a question needs to start off from the USA population, don’t use 314 million, just say 300 million … In special occasions where the interviewer really wants to test your quantitative skill, then you have to be precise. But don’t go into it because most of the time it is unnecessary.
Side-note: Boost up your Number speed and accuracy with our free Consulting Math materials and drills
4 – Always ALIGN assumptions with your interviewers
In the process of solving any Market-sizing and Guesstimate questions, you use assumptions. The killer tip is to pass the danger part to the other side of the table. Aligning every assumption with the interviewer is the way to get him / her also be responsible for the final result.
In addition, similar to #1 above, most interviewers will like candidates who align often. It is a good habit in real consulting jobs. An analyst may be exceptionally smart, but he will not do well without constant guidance and help from managers.
5 – SANITY check along the way and especially the final answer
Even though the final answer is not very important in this type of question, it would not be nice to have an unreasonable answer. Here is an example:
After rigorous analyses, you come up with the final answer to the question “How many Chinese use iPhone”: 9 billion … If you don’t realize there is some wrong with this number before giving it to the interviewer, you are in trouble.
Similar to the above, the habit of sanity check every number will score points for you. Interviewers love it, just like how they love their young consultants do sanity check on real data and analyses.