Ask two analysts to size the same market and you'll often get numbers that differ by 3×. Usually it's because one worked top-down and the other bottom-up — and neither said so. Both methods are legitimate. Both are wrong on their own. The point of using them together is that where they disagree tells you exactly which input to distrust.
Top-down starts from a broad published market and carves your sector out of it.
Warehouse robotics, illustratively: a published warehouse-automation market of $30B, of which robotics is a 30% slice, gives $9.0B. Fast, and it anchors to a number a committee has probably already seen. The danger: you inherit whatever assumptions sit inside that $30B, and if a report brokered it optimistically, your slice inherits the optimism. Worse, if the "capture share" creeps above ~60%, you've quietly redefined the sub-sector as the whole parent market.
Bottom-up builds from countable units — buyers, seats, facilities — times what each pays.
Same market: 72,000 automatable facilities × $150K/yr × 28% attach ≈ $3.0B. Every factor is a countable, citable number, which makes it the most honest method — and the easiest to lowball, because a tightly-drawn buyer universe silently shrinks the whole answer.
| Top-down | Bottom-up | |
|---|---|---|
| Anchors to | A published parent market | Countable units × price |
| Fails by | Inheriting an inflated parent, or an implausible capture share | Drawing the buyer universe too tightly |
| Bias tends | High | Low |
| Best for | A fast ceiling / sanity anchor | The defensible headline number |
Because the two methods bias in opposite directions, running both isn't redundant — it's a trap for bad inputs. Our engine performs an explicit price-coherence check: it back-solves the price-per-adopter implied by the top-down number and compares it to your bottom-up price assumption.
In the sample, top-down implies roughly $1.19× your bottom-up price — comfortably coherent. If that ratio blew out past 10×, it would mean one of the two methods has a broken input (usually price, attach rate, or capture share), and the report refuses to quote a single number until it's fixed.
Neither, alone. You trust the agreement. Bottom-up gives the most defensible headline; top-down gives the ceiling and the sanity anchor; a third method — value-theory — breaks ties. Reducing all three to a median with a stated spread is the whole point of triangulation.
The instant estimate computes top-down and bottom-up side by side and flags the agreement band for your own inputs.
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