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Fit for Scale
Your client is a health-tech startup considering launching a new fitness app focused on personalized strength training plans. They want to understand the potential market opportunity before investing in development and marketing. They’ve asked you to estimate the annual revenue opportunity for fitness apps in the United States.

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πŸ“‹ Solution:

Fit for Scale

Step 1: Segment the Market

We’ll segment the U.S. population based on fitness engagement:

  1. Highly Active Adults – regular gym-goers and fitness enthusiasts
  2. Casual Exercisers – people who work out occasionally or at home
  3. Non-Exercisers – limited to no fitness engagement (excluded from TAM)

Step 2: Estimate the Population in Each Segment

U.S. population β‰ˆ 330 million
Assume 75% are adults β†’ ~248 million adults

  • Highly Active: 20% of adults β†’ ~50 million
  • Casual Exercisers: 40% of adults β†’ ~100 million
  • Non-Exercisers: 40% β†’ excluded from sizing

Step 3: Estimate % Willing to Use Fitness Apps

  • Highly Active: 60% use fitness apps β†’ ~30 million
  • Casual Exercisers: 25% use apps β†’ ~25 million

Step 4: Estimate Willingness to Pay

Assume only a portion of users pay for premium features:

  • Highly Active: 50% pay β†’ 15 million paying users
  • Casual Exercisers: 20% pay β†’ 5 million paying users

Assume average price = $10/month β†’ $120/year

Step 5: Calculate Annual Revenue by Segment

  • Highly Active: 15M Γ— $120 = $1.8 billion
  • Casual Exercisers: 5M Γ— $120 = $600 million

Step 6: Add It All Up

Total U.S. fitness app market (subscription-based):
β‰ˆ $2.4 billion per year