Calculate TAM, SAM and SOM without making them up
Top-down vs. bottom-up market sizing, with worked examples.
7 min read intermediateUpdated Apr 6, 2025
BI
Reviewed by the editorial team · Apr 6, 2025
Step by step
- 01
Define each layer
TAM = total demand. SAM = the slice you can serve. SOM = realistic 3-year capture.
- 02
Top-down
Industry report × your % share. Fast, less defensible.
- 03
Bottom-up
Number of customers × ACV. Slower, much more credible.
- 04
Triangulate
If top-down and bottom-up differ by 10x, your assumptions are off.
- 05
Cite sources
Investors will check. Use Gartner, Statista, government data.
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