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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.

The top-down figure looked good on slides, but in real planning it felt detached. For our niche, the industry number overestimated the reachable buyers after filtering for who actually buys software like ours.

We built a bottom-up model from our lead list: counts of targets in our ICP, rough win rate from trials, and average deal size. It lined up with early revenue signals, though it was noisy and required a lot of assumption tracking.

Maybe the real bottleneck isn't market size at all. If the ICP is off or the sales cycle is longer than expected, a big top-down number doesn't fix that.

A compromise approach helped: use a top-down envelope as a sanity check and coarsely calibrate with a small bottom-up sample to see if the assumptions hold.

I kept watching the top-down figure drift as we added data, so it became less actionable and harder to defend in a plan.

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