The 1% fallacy
Good article. In fact, I'd go a step further and say that any percent is a fallacy.  Most business plans and pitch decks include the requisite section on market size, but who cares? The only thing that matters is how many customers are you going to have. That cannot reliably be determined from a top-down assessment. You don’t look at a pie and just say, “I’ll take 1% of that”.Instead you spell out through which methods you will gain and keep customers and how many you will gain via those methods. For SaaS, that could look like “We have x visitors to our website. We have shown with previous products and experiments a y percent conversion rate. From this, we estimate x * y customers at $d/month. With your funding, we should be able to increase the number of visitors to the product site by z% while maintaining or improving our conversion rate."These numbers are not a factor of market size.p.s. The only thing market size can tell you is what the upper bounds are for a product niche. But unless it's a very, very small niche; why does it matter what the upper bound is. If you hit that, you've got a good problem on your hands.