A multibillion-dollar global market does not tell an investor how many customers a startup can serve, at what price, or on what timeline. Bottom-up sizing starts with observable units and makes assumptions open to challenge. It separates the ambition from the conditions required to achieve it.
Define the buyer before counting the market
Is the customer a company, site, team, or user? Who signs and who pays? If deployment happens across sites but procurement sits at headquarters, counting each site as an independent customer may overstate reach. Conversely, a group can represent multiple billable units if its contract supports that structure.
For a new market, Sequoia suggests considering the number of users or customers and their value per unit. We use that logic as a starting point, then examine the commercial constraints of the specific business. Sequoia, How to Present to Investors.
Build a calculation you can unpack
A starting estimate can multiply target accounts by plausible annual revenue per account. The output remains an assumption until both inputs are substantiated. Document where the account count comes from, which businesses qualify, and the geographic scope. Connect pricing to contracts, pricing tests, or budgets from comparable buyers.
In Sillage, 8,000 sites multiplied by €18,000 produces €144 million. The screening analysis flags that the site count is not sourced. The arithmetic is correct; the market estimate is not established. Fictional Sillage market assumption, page 4, in French.
Separate theoretical demand from reachable demand
The universe of potential buyers may be much larger than what the business can reach over the next few years. Language, regulation, integration, distribution, and sales cycles constrain practical reach. Make those filters explicit instead of taking an arbitrary percentage of a large top-down number.
Reach also needs to fit the commercial organization. A forecast requiring hundreds of new customers is not supported simply by a long prospect list. Explain opportunity generation, conversion, implementation time, and service capacity. A market model that ignores those constraints describes possibility rather than a credible operating path.
Test price and selling unit together
Average revenue from large accounts may not transfer to the smaller buyers targeted next. Sillage’s screening highlights the move from current average revenue of €60,000 per account to an assumption of €18,000 per site. That gap raises a commercial question: can smaller units be acquired and deployed at a compatible cost?
Show alternative pricing or penetration assumptions where useful, but do not let many scenarios disguise missing evidence. A good sensitivity isolates the factor that matters. If implementation cost drives most of the result, prioritize evidence on that variable.
State what would change the estimate
Identify the evidence that could revise the market: a better-qualified account database, an adjacent-segment contract, buyer interviews demonstrating budget, or an overlooked integration constraint. The committee can then distinguish credible ambition from artificial numerical precision.
This discipline does not reduce ambition. It explains the economic path between today’s product and the claimed opportunity. Preserve the calculation, sources, and limitations in the memo so that new information can update the estimate without losing the original reasoning.