Bottom-up TAM (Total Addressable Market) calculation is a method of estimating the total market size by starting with the most granular data available—such as individual sales or user data—and scaling it up to reflect the entire market.
Examples:
A SaaS startup calculates their TAM by identifying the number of small businesses in their target region, estimating how many of them could realistically become customers, and multiplying that by their product’s annual subscription fee. This approach gives a more realistic estimate based on actual customer data rather than relying solely on industry reports.
Related Terms:
TAM, Top-Down, Market Overview