Pick top-down or bottom-up
Top-down starts from a big number and narrows: population → households → share who'd buy → how often → price. Bottom-up builds from a unit: one store's sales × number of stores, or one customer's spend × customers.
Say your approach before you calculate, write each assumption down, and round to easy numbers (330 million becomes 300 million). Interviewers care more about clear logic than the exact answer.
When you can, do it both ways. If the two land within about 2x of each other, you can trust the order of magnitude.
Worked example
Size the yearly US market for dog grooming, top-down. Tap the steps in order.
- US households (~130M)
- Share with a dog (~40%)
- Share that pay for grooming (~50%)
- Visits per year × price per visit
Households, then dog owners, then paying customers, then frequency times price. Vets and stock prices don't size grooming spend.
Quick check
Why do the market size both top-down and bottom-up when you can?
If the two land close together, you can trust the order of magnitude. Two independent routes to a similar number is the best sanity check you have in a case.