GUESSTIMATES

Approach 1 - Simple Maths approach

This approach is essentially used when the number to guesstimate is a ratio of some
sorts. The task is to then find the numerator and denominator and we are done!

Example - What is the number of tennis balls that can fill this room?
In this case, numerator is the volume of the room and denominator is the volume of a
tennis ball. For accuracy and realistic answer, the volume of room is adjusted by
deducting items present in the room like furniture, people etc. Similarly, the volume of
tennis ball should include a packing factor with it.

Approach 2 - Per capita approach

This approach is used when the number to guess can be thought of a consumption item
at an individual, household or population level within a geography.

Example - Number of mobile phones in a country

In this case, mobile phone is a consumable item at an individual level. The approach
would require to break the overall population in to difference clusters where the
consumption per capita would vary. example - mobile phone per person is different if we
cluster the population by income and age groups. Consider 4 different age groups and 3
different income groups. Put an assumption on number of mobile phone per person in
each of the 12 buckets, roll up the numbers and you have a guesstimate.

this approach can be used in cases like mobile phone, refrigerator, microwaves, tablets,
PCs, Cars, ATMs, Bank Branches, Restaurant branches etc.

Approach 3 - Supply & Demand approach

This approach requires to think of the guesstimate number from either the supply or the
demand (or both) angle of the item.

Example - Toilet paper used annually in Canada

In this case, demand approach is to find avg consumption per head and then rolling it up
the population. Supply would be to find out number of companies manufacturing, their
capacities of manufacturing etc (Supply approach is tougher one).

Other examples can be # of flights taking off weekly from JFK, # of telecom towers in
California etc
Filters to zero in on the exact Customer Segment:

1. Rural-Urban (Geography-wise)
2. Gender Split
3. Age Split
4. Income Split
5. Willingness

Strategies to solve a Guesstimate:

Types of Guesstimates based on Approach to the Solution:

 Top-Down Questions: Questions that involve starting with an entire
population (in other words, the “top” level) and then breaking it down until
you arrive at an answer. For example, consider the question about the number
of schoolteachers in Chicago. A simple way to approach it would be to start
with the population of Chicago, then estimate what percentage of the
population is of student age, and then estimate the number of students per
class. Using this, you would arrive at an estimate of the number of school
teachers, because at any given time there is (generally) exactly one teacher per
class. To show your ability to be creative and think outside the box, you could
also attempt to account for retired teachers and substitute teachers.

 Bottom-Up (Ground-Up) Questions: For these questions, rather than

starting from the “top” with a high-level figure such as population, the best
approach is to start from the “bottom”—some low-level statistic, such as
Revenue per customer, and build your way up to the answer. For example,
consider the question pertaining to the monthly revenue of a hair salon. In
this case, we’d recommend you work out the revenue for a week and then
multiply that by four (or if you are quick at multiplication, 4.3). You could
start with an assumption regarding the average price per client visit, and then
estimate weekly volume by assuming the number of chairs in the salon, the
number of hours it is open per week, and the average number of clients chair
per hour. To show your ability to be creative and think outside the box, you
could also add revenue for hair salon products sold. You may also want to
break the estimate into male and female clients, as male clients at hair salons
tend to spend less money per visit but also take less time on average.
Types of guesstimates
1- Standing alone – no of flights fly in delhi
2- Marketing sizing

Approach
Household

Population

Structural (Bottleneck)

Case 1

Flights

Points to ask

Clarify ( day type, no of airports b , civil or military too)

Strategy

(supply , demand)

With least assumptions

Assumptions – confirm

Find Bottleneck

Solve without a mess

( use space proper)

Order of magnitude check

(check with another approach quickly without assumptions)

Key filters

Rural (70) / urban(30)

Gender split male(1000) / female(900) or 1:1

Age split 0-18 /18-30/30-40/40-60/60+ india young country 50% upto 25 ///0-5/5-10

OR USE Life Expectancy 60 genrally

1.2/60- gives no of people with every year

Literacy ratev ( north, south, east, west) //// (urban /rural) // ( male/ female)
Income split

5 super rich -30 lpa +

15 rich -

40 middle

40 poor

Few Strategies / Pointers

Regarding the setting

Approach ( S & D)

Temporarly unformly Assumptions ( anything special) average day

Regarding the solution

Time Unit analysis- day, week, monthn ( would be useful) for a movie it would be 1 month , for
cigratte it would be hour

Nature of users ( filters as above )

Lifetime of product ( like car, tv) -new user( 10%) more than gdp as a growth

- Replacement (old user)

Peak time analysis ( kewps changing at different time ) like ( metro, airline)

Frequencyy-peak , normal (2/3), low(1/3)

Bottleneck find ( so kno3w the peak capacity)

Occupancy rate –efficiency (0.8-0.9)

Regarding Troubleshooting
On small level with all adjustments( 10 – 20 people
sizwe)

Bottleneck

(constraint)
No of ac in a yr in india

1.2 billion

4 members

0.3 families = 300 million

Super rich ( 3 acs) -5 =0.05*3*300=45

Rich ( 2 acs)-15= 0.15*2*300= 90

Middle( 0.8)-40=0.8*0.40*300=96

Poor (0)-40=0

==== 231/8 =3 millions + new users =35 lakh

Lifetime 8 yrs

5-(4-18) /14 = 56/14

0.4
5 million

5-1 =0.05

15-1 0.15

40-0.9 =0.36

40

=60 bpl = 0.24

5 - 4-9 =5*.4*.24 = .48

5-8 -9-12 =3*4*.24 =.288

8-10 12-15 = 3*4*.24 =0.288

10-12 15-18 =3*.4*.24 =0.288

-5 80 = 0.48*0.9 =0.043

5-8 60 = 0.288*.54 = 0.0112

8-10 60 0.288*.32= 0.009

10-12 60 0.288* .19 = 0.0052 = ( 0.065)

40 low lincome = 0.16 .8 =0.132

5 -1

5-8-1

8-10 80

10-12 90

==== 0.065+0.132+0.05+0.15 +0.37= 0.52+0.11+0.132= 0.24+.52 = 0.76*5 =3.8

No of atms in india

Urban 382 persons per sq km

Jaisalmer to delhi to Kolkata to 200 =800+1500+200=2500

Kashmir to delhi to Mumbai to Hyderabad to kerela =2500*1.3= 3200

Area =3200*2500/2 = 4000000

Population

1.2 billion 1.2*10^9 =

Population density = 1200000000/4000000

= 300 person per km

Population density of rural is less = 250

Population density of urban and atm/ km

Tier 1 =1.6*300 =480 | 4 km | 8*1.5 = 12 =15 = 15*10^6 / 480 =31250/ 8000

Tier 2 = 1.4*300 =420 | 7 | 0.75*100 =75=85 *10^6 /420 = 200000 / 7 = 30000

Tier 3 = 1.2*300 =360 | 10 | 160 =160 *10^6 /360 = 400000 /10 = 40000

Urban 0.36 = 360 million

Rural 0.84*10^9 = 84*10^7 /250 = 84*4*10^7/1000= 3360000 km

Rural

Toom backward = 1 in 25-30 km

Normal = 1 in 15-20 km

Mean = 20 km / atm = 3360000/20= 118000

Total = 118000+78000 = 200000

Diapers

Age group / diapers per day

Young country 0-15 -25%

Per year = 0.25*1.2/15 = 25*12/15 = 0.02 *10^9 = 2*10^7 /12 = 1.6*10^6 = 1.6 million / month

Rich ( 20%)

0-3 use less diaper as mostly at home and also too much use , 2/day = 2*1.6*3= 9.6

3-6 = in the night 2 , 3 in a day = 3 /day = 3*1.6*3= 14.4

6-12 = 5 / day =5*1.6*6= 9.6 =48

12-24 = 4 / day=4*1.6*12 =19.2*4 =77

24-36 = 2.5 =2.5*1.6*12 = 48

36-48 = school start 3/day = 3*1.6*12= 58

48-60 = mature a bit 2/ day = 2*1.6*12= 38

60-72 = rarely only in functions and oustside also some in school = 0.8/day = 0.8*1.6*12= 13

=== 24+48+77+86+58+13 = 72+90+144 =300*.2 =60

Middle(40%)

0-3 use less diaper as mostly at home and also too much use , 1/day = 1*1.6*3= 4.8

3-6 = in the night 2 , 1 in a day = 3*1.6*3= 14.4

6-12 = 2 / day = 2*1.6*6= 19.2

12-24 = 2 / day =2*1.6*12= 38.4

24-36 = 1.5 = 1.5*1.6*12= 28.8

36-48 = school start 2.5 /day = 2.5*1.6*12= 48

48-60 = mature a bit 1/ day = 1*1.6*12= 19.2

60-72 = rarely only in functions and oustside also some in school = 0.4/day = .4*1.6*12= 6

=== 19+29+68+29+48+19+6= 96 +74+48 = 178*.4 = 70

Poor (40%)

70 +24 = 94 millions / day

Revenure = 70*10+24*20= 480 +700 =1180 million rs / day

Cost per dia[per =