How much time should I spend estimating TAM?

Two words: Relatively little.

Something in the range of 2-4 hours perhaps - definitely measurable in hours and not days.

TAM estimation is a little bit of a black art where you take the very imperfect data that you have, make some assumptions, and put out magic numbers that could be quite far from the mark. There are so many unknowns that spending days having fun with spreadsheets is just not a great investment in time.

Remember: TAM estimation is not a math exercise but a litmus test for whether this venture is worth your time. It's a tool that helps you iterate without overinvesting in the wrong thing early on in your business.

By the way: It helps if you are a student and have access to analyst reports via your school library system - that can save you a bit of time on secondary market research. 

 

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