What’s the best way to size the TAM for a niche B2B software tool?

[NoahNG]

I’m trying to size the total addressable market for a niche B2B software tool, but I’m stuck on whether to use a top-down industry report figure or build a bottom-up model from my own lead list. The top-down number feels too broad and optimistic for realistic planning, but my bottom-up approach might be missing entire customer segments I haven’t identified yet. How have others navigated this gap between the theoretical market size and the practical, attainable one?

[LukeKJ]

I tried starting with a top-down TAM pulled from a big industry report. It looked impressive, but after a few conversations I realized how much of that is potential rather than real buyers with budgets. It felt optimistic for planning. I ended up focusing on a smaller, serviceable slice that actually exists in our ICP and can realistically convert in the first year.

[Sophia50]

I went bottom-up from my lead list and the numbers hit me right away: it felt tiny. We had about 120 target accounts, and with a rough 15% engagement rate and 20% pilot conversion, we could map a cautious path. But I kept wondering what accounts we’re missing, like a related vertical we haven't checked yet.

[GeorgeJ]

I keep telling myself the problem might be something else, not the market size. We toyed with a couple of pricing tests and found that interest dropped when the value props got crowded with competitors. Maybe it’s more about product-market fit and timing than chasing a bigger market.

[Jonathan.S]

One time I wandered off topic chasing a compliance feature a regulator asked about. It felt like a dead end, and I wasted a sprint. Still, talking to a few early adopters hinted at other segments to explore, though I never followed that thread to see if there was real upside.