Top-down market estimates make for impressive slide decks, but they rarely survive the first hard question from an investor, a CFO, or a skeptical board member. When you need a market size figure your organisation can actually plan against -- one that connects to real customers, real purchase behaviour, and real revenue math -- bottom-up market sizing is the approach that delivers.
At Meraki Research, we specialize in building market models from the ground up: starting with the individual customer, quantifying unit economics, and aggregating to a total that reflects how your business actually makes money. This method produces estimates that are more granular, more defensible, and more directly useful for planning than any approach that starts with a macro industry figure and works downward.
Our Approach: The Meraki Build-Up Methodology
The distinction between bottom-up and top-down is not just academic -- it changes which assumptions your model depends on, and therefore how much confidence you and your investors can place in the result. Our Build-Up Methodology anchors every estimate in observable, verifiable inputs.
Phase 1 -- Customer Universe Definition
We begin by identifying and quantifying the total pool of potential customers for your product or service. For a B2B company, that might mean counting establishments by industry code, employee number, and geography. For a consumer brand, it might mean estimating households that match your target demographic and psychographic profile. The key is specificity: we define who can buy, not who might theoretically be interested.
For example, a startup selling compliance-automation software to South Africa banks would begin by counting FDIC-insured institutions by asset tier, filtering for those with the regulatory complexity that creates demand for the solution. That number -- say, 3,200 institutions -- becomes the foundation of the entire model.
Phase 2 -- Purchase-Behavior Modeling
With the customer universe defined, we model how those customers buy. What is the average contract value or transaction size? What is the typical purchase frequency? How does purchasing vary by customer segment? We populate these inputs through a combination of primary research (surveys, expert interviews, customer data analysis) and secondary benchmarks. This is the heart of the bottom-up approach: every dollar in the model traces back to a specific buying behaviour.
Phase 3 -- Segment-Level Aggregation
We aggregate across customer segments to produce sub-market totals, then roll those up into a complete market size figure. Along the way, we maintain full segment transparency so you can see which customer types, geographies, or use cases contribute most to the total. This granularity is exactly what makes the bottom-up method so valuable for planning: it tells you not just how big the market is, but where the revenue actually sits.
This phase also produces the natural bridge to a TAM, SAM, and SOM cascade. The total aggregation represents your TAM; the segments you can realistically serve become the SAM; and the share you can capture given current resources becomes the SOM.
Phase 4 -- Cross-Validation with Top-Down Data
A strong market sizing exercise uses both approaches. Once we have the bottom-up total, we compare it against top-down industry figures to identify convergence or gaps. If the numbers diverge, we investigate why -- it might reveal a data gap, a definitional difference, or a genuine insight about market structure that neither method alone would surface. This triangulation step is what elevates the analysis from a single estimate to a robust, auditable model.
Phase 5 -- Sensitivity Analysis & Growth Projections
We stress-test every key variable: customer count, average deal size, penetration rate, pricing assumptions. What if the number of eligible customers is 20 percent smaller than estimated? What if average contract value grows 15 percent as the market matures? These scenarios turn a static estimate into a dynamic planning tool. We also project forward, modelling how the market opportunity evolves over a three-to-five-year horizon based on adoption curves, competitive dynamics, and macro trends.
When Bottom-Up Market Sizing Is the Right Move
This approach fits when you need to:
- Produce a market size estimate that investors can audit assumption by assumption
- Size a niche, emerging, or poorly documented market where reliable top-down data does not exist
- Connect market estimates directly to revenue planning, territory design, or quota setting
- Build credibility with a board, investment committee, or acquirer who will scrutinize your math
- Understand market composition at the customer-segment level, not just the industry level
This method is not the best fit when:
- You need a quick directional estimate for early-stage brainstorming (a lighter market sizing engagement may suffice)
- The market is so broad and well-documented that top-down data alone provides sufficient precision
- Your primary question is about competitive positioning rather than market volume (consider our Competitive Landscape Analysis)
What We Deliver
Every bottom-up market sizing engagement produces deliverables designed for both strategic decision-making and operational planning:
- Bottom-Up Market Model -- A fully transparent spreadsheet showing every input, assumption, and aggregation step from individual customer segments to the total market. Built for your team to own, update, and extend.
- Market Sizing Report -- A narrative document (25-40 pages) that walks stakeholders through the methodology, key findings, and strategic implications. Written for executive and investor audiences.
- Segment Heat Map -- A visual ranking of customer segments by market size, growth potential, and competitive accessibility
- Scenario Playbook -- Base-case, upside, and downside scenarios with clear assumptions and revenue implications for each
- Investor Presentation -- A concise slide deck translating the bottom-up analysis into a compelling market opportunity narrative
Industry Applications
Startups & Venture-Backed Companies For startups seeking seed, Series A, or growth-stage funding, a bottom-up model is often the only credible path to a defensible market size. We help founders and their teams build the kind of analysis that venture investors respect -- one where every number connects to a real customer and a real buying behaviour.
Technology & SaaS Sizing addressable markets for new software categories, platform expansions, or vertical solutions. When the market is emerging and top-down data is scarce, bottom-up sizing from customer counts and contract values provides the necessary rigor.
Healthcare & Life Sciences Estimating addressable patient populations, procedure volumes, or device placements by building from provider-level data. Healthcare markets are segmented by institution type, payer mix, and regulatory status -- all of which the bottom-up method captures naturally.
Consumer & Retail Quantifying market opportunity for new brands, product lines, or retail concepts by starting with household-level purchase data and scaling by demographic and geographic segment.
Industrial & B2B Services Sizing markets defined by the number of establishments, average spend, and purchase cycles. Industrial markets often lack reliable top-down data, making the bottom-up approach especially valuable.
Private Equity Providing independent, auditable market models for investment diligence, portfolio-company growth planning, and exit narratives. PE firms need market numbers built from verifiable inputs -- our bottom-up models meet that standard.