Use both top-down (industry data) and bottom-up (customer count x average spend) approaches, then triangulate. When the numbers diverge, investigate why.
Strong answers show both top-down and bottom-up approaches: TAM from industry reports and total addressable spend, SAM from realistic segment targeting, SOM from current capabilities and go-to-market reach. Best candidates acknowledge the uncertainty in market sizing and describe how they validated assumptions with real data.
Tests business acumen. PMs who cannot size an opportunity struggle to prioritise investment decisions. Ask: "How did your market sizing influence the go/no-go decision?" to see if it was genuinely used.