There are several methods to calculate TAM: Top-Down Approach This method involves using industry research reports and market data to estimate the total market size. For instance, if a report states that the global market for a specific industry is $10 billion, this figure can be a starting point for calculating TAM. Bottom-Up Approach In the bottom-up approach, entrepreneurs start with specific data points like the average selling price and the number of potential customers. For example, if you are selling a software subscription at $100 per year and there are 1 million potential users, the TAM would be $100 million. Value Theory Approach This approach estimates TAM based on the value a product or service provides to its customers. It involves understanding how much customers are willing to pay for the product and multiplying it by the total number of potential customers.