Top-down forecasting, in contrast to “bottoms-up forecasting”, refers to the method of estimating future performance by starting with high-level market data, such as the TAM of a business, and working down to your estimated market share to determine projected revenues for the coming year.Early stage startups typically use top-down forecasting when they don’t have any hard metrics (e.g. revenue, customer lifetime value, churn). As they mature, they transition from the top-down model to the bottoms-up model mentioned above.