Is bottom-up always better than top-down?

Bottom-up is more defensible because the assumptions are explicit and testable. Top-down is faster but less rigorous. Most real sizing exercises blend both for cross-check.

How big is a typical sizing engagement?

12-25 expert interviews + desk research, 2-4 weeks elapsed. €10,000-€40,000 typical pricing for a category-sizing project.

When does sizing genuinely add value vs being a tick-box exercise?

When the assumptions are surfaced honestly and the sensitivity is real. Sizing exercises that produce single confident numbers should be treated with suspicion.

Market Sizing

Market sizing is the estimation of the total addressable, serviceable and obtainable market (TAM, SAM, SOM) for a product, category or business model. Defensible market sizing is built bottom-up from operator and channel data rather than top-down from analyst extrapolation.

Term: Market Sizing
Section: Glossary
Last refreshed: Q1 2026

01/In Depth3–5 paragraphs

The TAM/SAM/SOM framework distinguishes total category size (TAM) from the segment you could realistically serve given your product and go-to-market (SAM), and the share of that segment you could realistically obtain (SOM).

Bottom-up market sizing reconstructs market value from underlying operator economics: typical customer cohort sizes, average deal values, conversion rates, churn. Top-down sizing extrapolates from published analyst category numbers. Bottom-up is more defensible because the assumptions are explicit and testable.

Common failure modes: confusing total market with addressable market; using list prices rather than transacted prices; assuming category growth uniformly distributes across sub-segments; relying on single-source analyst sizings without triangulation.

Honest market sizing acknowledges the assumptions that drive the answer and surfaces the sensitivity. A €100M TAM that flexes to €40M-€250M depending on three identifiable assumptions is more useful than a €100M point estimate that pretends to precision.

02/Examples4 concrete cases

+A startup builds TAM/SAM/SOM for fundraising — testing assumptions with 15 operator interviews
+A PE buyer builds bottom-up category sizing for a vertical-SaaS investment thesis
+A corporate strategy team builds market sizing for an adjacent-category entry decision
+A growth investor commissions sizing on an emerging category with no credible analyst coverage

03/Frequently Asked3 questions

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04/See AlsoWhere this applies

04.1

EXPERT CONSULTATIONS

One-hour calls with vetted operators, executives and specialists across 50,000+ professionals. Scheduled in 3 to 5 business days. From €500.

04.2

MARKET SIZING

Bottom-up TAM/SAM/SOM validated by operators in the category.

05/Related Terms2 suggestions

TAM SAM SOM

TAM is the Total Addressable Market — the maximum revenue a category could generate if every buyer used the product. …

PRIMARY RESEARCH

Primary research is original data collected directly from sources — operators, customers, channel partners, ex-employ…

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