For healthcare entrepreneurs in India, market sizing often presents a unique set of challenges. While founders sometimes struggle with lack of healthcare data, investors demand precise figures in what is essentially an evolving landscape. This makes the market size analysis a critical component of any healthcare pitch. Rather than focusing solely on numbers, the discussion should center on key assumptions that make founders excited about India's healthcare opportunities.

The fundamental math is straightforward: market size = number of patients × revenue per patient per year.

For example, if you're targeting diabetes management in urban India, you might calculate: 35 million urban diabetics × ₹2,400 average annual spending on diabetes management = ₹84 billion potential market.

Given the characteristics of India's healthcare system and its fragmentation, the key assumptions required to calculate patient/consumer numbers and healthcare spends need careful consideration.

Building-blocks for Accurate Market Sizing

1. Market Segmentation

When I hear pitches mentioning "general population" as a target market, I respond: "The general population doesn't exist as a meaningful market segment." Proper segmentation is crucial - are you targeting urban diabetes patients, rural maternal care, or tier-2 city diagnostic services?

2. Revenue Model and Pricing Strategy

Your initial pricing structure will likely evolve, especially in a price-sensitive market like India. Consider factors like:

• Government insurance coverage
• Out-of-pocket spending capacity
• Competitive pricing in your segment
• Public vs private healthcare dynamics

3. Patient Pool Estimate

While exact numbers may not be available, you can leverage:

• National Health Mission data
• State-level health statistics
• Disease burden studies
• WHO and other international health organization reports

More sophisticated market sizing must address:

1. Patient Numbers
- What drives your projected market share?
- How will healthcare-seeking behavior evolve?
- What impact will competitors have?
- How will government initiatives affect your addressable market?

2. Patient Segments
- Will you expand beyond your initial target demographic?
- How will tier-2/3 city expansion affect your model?
- What role will telemedicine play in reaching new segments?

3. Revenue Projections
- How might government regulations impact pricing?
- What's the potential for value-based care models?
- How will patient retention vary across segments?
- What's the impact of increasing health insurance penetration?

Let's simplify these concepts for the Indian healthcare context with a digital health platform example:

TAM (Total Addressable Market): "Total healthcare spending on your problem area"
Example: All outpatient consultations in India = 4 billion annual visits × average ₹500 per consultation = ₹2,000 billion

SAM (Serviceable Addressable Market): "Your target healthcare segment"
Example: Urban smartphone users seeking healthcare = 300 million urban smartphone users × 4 consultations per year × ₹500 = ₹600 billion

SOM (Serviceable Obtainable Market): "Your achievable market share"
Example: Realistic 5-year market capture = 5% of SAM = ₹30 billion

Consider Practo's evolution: Their TAM wasn't just "doctor appointment bookings" but "all healthcare access points." Their SAM focused on urban digital health seekers, while their SOM reflected their ability to capture and retain users in competitive markets.

Many Indian healthcare founders underestimate their market size by thinking too narrowly. A disruptive healthcare solution often impacts multiple adjacent markets. Consider these examples:

1. Telemedicine Platforms

Instead of limiting TAM to "online consultations" (₹100 billion), consider the broader market:
- Primary care visits: ₹500 billion
- Chronic disease management: ₹300 billion
- Mental health support: ₹150 billion
- Health education: ₹50 billion
- Remote monitoring: ₹200 billion
Total expanded TAM: ₹1,200 billion

2. Diagnostic Startups

Rather than focusing solely on "pathology tests" (₹120 billion), consider:
- Preventive health screening: ₹80 billion
- Corporate health programs: ₹60 billion
- Insurance-linked diagnostics: ₹90 billion
- Home healthcare services: ₹70 billion
Total expanded TAM: ₹420 billion

Note: This represents a significant expansion from the initial ₹120 billion market, demonstrating how reframing your market can reveal larger opportunities.

Take inspiration from successful Indian healthcare startups. For instance, 1mg's early pitch focused on two key market drivers:

1. Rising chronic disease burden
2. Growing digital health adoption

While you should include specific numbers in today's fundraising environment, the underlying story and logic must be compelling. Frame your market size narrative around:

• Growing healthcare awareness and spending
• Digital transformation in healthcare delivery
• Increasing insurance penetration
• Government healthcare initiatives

Remember, India's healthcare market is undergoing rapid transformation. Your market sizing should reflect not just current realities but the emerging opportunities in healthcare delivery models.