estimation-fermi

# Fermi Estimation

## Table of Contents
- [Purpose](#purpose)
- [When to Use](#when-to-use)
- [What Is It?](#what-is-it)
- [Workflow](#workflow)
- [Common Patterns](#common-patterns)
- [Guardrails](#guardrails)
- [Quick Reference](#quick-reference)

## Purpose

Fermi estimation provides rapid order-of-magnitude answers to seemingly impossible questions by decomposing them into smaller, estimable parts. This skill guides you through decomposition strategies, bounding techniques, sanity checks, and triangulation to make defensible estimates when data is scarce, time is limited, or precision is unnecessary for the decision at hand.

## When to Use

Use this skill when:

- **Market sizing**: Estimating TAM/SAM/SOM for product launch, addressable market for new feature, competitive market share
- **Resource planning**: Infrastructure capacity (servers, storage, bandwidth), staffing needs, budget allocation, inventory requirements
- **Feasibility checks**: Can we build this in 6 months? Will customers pay $X? Is this market big enough?
- **Strategic decisions**: Build vs buy tradeoffs, enter new market assessment, fundraising/runway calculations, pricing validation
- **Business metrics**: Revenue projections, customer acquisition costs, LTV estimates, unit economics, break-even analysis
- **Impact assessment**: Carbon footprint, energy consumption, social reach, cost savings from initiative
- **Interview questions**: Consulting case interviews (piano tuners in Chicago), product sense questions, analytical reasoning tests
- **Quick validation**: Sanity-checking detailed models, pressure-testing assumptions, getting directional answer before investing in precision

Trigger phrases: "ballpark estimate", "order of magnitude", "back-of-envelope", "roughly how many", "feasibility check", "gut check", "triangulate", "sanity check"

## What Is It?

Fermi estimation (named after physicist Enrico Fermi) breaks down complex unknowns into simpler components that can be estimated usi