← Every exhibit
Why do top-down market sizing models fail in commercial execution?
| Dimension | Top-Down Sizing (Analyst Research) | Bottom-Up Sizing (Unit Operations) |
|---|---|---|
| Primary data source | Third-party industry analyst reports (Gartner, IDC) | Company CRM data, firmographic registries, lead lists |
| Core calculation logic | Applies speculative percentage haircut to macro industry | Multiplies verified account counts by realized deal size |
| Addressable boundaries | Assumes universal product compatibility | Excludes accounts lacking required integrations or scale |
| Sales capacity constraint | Ignored; assumes infinite commercial execution | Directly bounded by sales rep ramp, quota, and deal velocity |
| Competitive displacement | Assumes greenfield capture | Models incumbent switching costs and contract lock-ins |
| Decision relevance | Useful for venture capital storytelling | Mandatory for territory design, hiring, and revenue quotas |
| Typical failure mode | Massive overestimation of reachable revenue | Can be overly conservative if new channels are omitted |
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Reference & Evidence
Source: Table from this essay. Sources and interpretation are given in the article.
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