Okay, but it's just you

Slide three of your deck reads: “A trillion-dollar global industry.” Behind it, a hockey-stick chart. The pitch is clean, the product is beautiful, and the room is a regional pitch night run by a bank and a university. You left a steady job in pharmaceutical sales to build a non-alcoholic functional beverage, and you believe the number on slide three, because every report says it is true.

The judges nod politely and fund someone else. The number gave them nothing to check. It describes the whole industry, and you are one person with one product.

I have sat at the judges’ table for events like this one, as a counselor and as a business-plan judge. When slide three goes up, I wait until the end and then I ask the question I ask most founders in this seat.

Okay, but it’s just you.

Why is a trillion-dollar market size a weak number?

Because it is a number about other people. Market share is a big-company measure. Whether Pepsi or Coke holds the bigger share is visible to anyone with a browser. Your new drink’s share of that same market has nothing to compare it to: little public data, few public companies your size, and a total so large that “if we get one percent” sounds like a plan and describes a hope.

An investor reading that slide asks one question under all the others: is there fundable demand that you can reach? A trillion dollars has no names in it. In my experience, a founder who assumes they will come, with “they” unidentified, is describing a plan to buy overhead and wait.

The right frame comes from how I define growth. There are four definitions: top-line revenue, margin, equity, and market share or fans. For a business your size, the fourth one is fans. A fan is a person who has chosen you, and you can count them.

Why do I think of it as a four-seat airplane?

Take a four-seat airplane like the Piper Warrior I learned in. A pilot of that airplane is rarely asked how much of the world’s air traffic it carries. The questions that matter are how many seats there are, which runways the pilot can land on, where fuel is available along the route, and who is ready to get in. Those are numbers a pilot can count before leaving the ground, and they decide whether the trip happens.

Your slide three is the number of passengers moving through the world’s airports in a year. It is true and it is no use to a four-seat airplane. Distribution is the runways and fuel stops between you and the buyer, and fans are the people in the seats. You can count both.

What can I count instead?

Distribution. A trillion-dollar industry is a question of how a trillion dollars gets distributed, and where the gaps are in that distribution. You can walk around it and count it.

Start at the back end. The channels that move what you sell: how many distributors, trucks, couriers, cold rooms, shelves and platforms serve your category in the region you plan to enter, and who owns them. For her beverage, that was nineteen regional distributors, of which six already carried a functional brand. That count was three weeks of phone calls.

Then the middle. The people and machines that can do the work. Count the co-packers within reach that can run a small batch of her formula, then map the ramp-up when orders double and the cool-down when they fall.

Then the front. The channels able to carry her message to the person she has in mind. Gyms, studios, a handful of grocers, two regional podcasts, the online groups and forums where her buyer talks to peers.

Written out, it reads like a sentence an investor can check: there are this many companies serving this value in the production and distribution of what we offer, in the market we intend to serve, and here is the gap in that distribution that our awareness, our access or our affordability can take.

That is a number a business your size can read. It is also where a smaller company stops getting lost in the trillions.

Then what is my target?

Make your target your fans. Take what it costs you to produce, your margin, your price, and the life you wrote down that the business has to fund. Then compute how many people have to buy from you each month for all of it to work.

She did the work. Her margin per case, the income she needs, and the reorders she can expect gave her a number: about nine hundred repeat buyers a month in her home metro. Nine hundred, with names she could start on: the gym owners, the studio owners, and the people who already follow her.

A number like that is something you can run a business against. A trillion is something you can only gesture at.

Notice what happened to the deck. Slide three changed. It now showed the distribution count, the gap she could take, and the fans she needed. The pitch got shorter and the questions got better. One of the bankers asked who the nine hundred were. She had a first-name list of forty.

The move for this week

Open your deck and find the slide with the biggest number on it. Move it to the end.

Then write three counts on a page. The back end: how many channels move what you sell in the region you plan to enter, and who owns them. The middle: how many people or machines are able to do the work, and what happens when demand doubles. The front: how many channels can carry your message to the buyer you described.

Write the gap you can take.

Finally, write your target in people per month. Use your production cost, your price, and the life the business has to fund. Start the list with the first forty names.

Measuring distribution is yours to use freely. You will not run a trillion-dollar industry. You will run a section of it, and you can count the seats.