Quick and Dirty Futzing
For the benefit of futzers everywhere, this is version 1.0 of a tool for the most common forecast futzing problems. It is for those who do not want to take the time and trouble — or do not know how — to build a diffusion model.
There is nothing wrong with futzing. A futzed forecast embodies the opinion of the analyst about how a market will evolve. A forecast is worth no more and no less than the forecaster’s resume plus the reputation of the company publishing the forecast. Unfortunately, there are many forecasts sold that are not worth the bits they are printed on — but that has nothing to do with futzing.
Let’s face it — most published product sales and penetration forecasts are created by futzing with historical data and growth rates until the analyst deems the numbers reasonable — or they just run out of time. Companies buy millions of dollars of market analyses containing futzed forecasts — so, who am I to argue.
How to Futz a Forecast
Using the Forecast Futzer tool, do the following:
Hold the mouse cursor over each item in the toolbar for a tooltip description.
Step 1. Enter the product category.
Step 2. Select the region.
Step 3. Select the starting year and the number of years.
Step 4. Select the model (e.g., physical product). Also, select the model subtype.
Step 5. Enter the required starting values in the yellow boxes.
Step 6. Use the sliders to apply growth rates to the starting values. The top slider is the growth rate, which if the lower slider is zero, is constant for the forecast period. The lower slider is the growth rate of the growth rate. This is a commonly futzed item; for example, in a new product forecast the growth rate typically declines, which is indicated by selecting a negative value for the lower slider.
Step 7. Export the model including formulae and charts to Excel.
Definition of “Futz”
“Futz” means “to fiddle with.” And, fiddling with the numbers until I have curves that sing to me about the future brings joy to my heart. Go fiddle.