Fermi Estimation

Get a defensible order-of-magnitude answer from factors you can reason about. The goal is the right power of ten and a clear view of what drives it, not a precise number.

When to use

• Capacity, load, storage, cost, headcount, market size or time estimates with little data.
• "Roughly how many", "ballpark", "back of the envelope", "is it even feasible".
• Checking whether a plan's numbers are plausible before investing in measurement.

Skip: when exact data exists (query it instead), or the user needs a precise calculation.

Before you start

1. State in one block: Quantity (with units and period), Purpose (what decision depends on it), Needed accuracy (a power of ten, or within a factor of 2), and Pass (Decompose, Estimate, Combine, Cross-check, Sensitivity).
2. Gather first. Look for real anchors before guessing: logs, dashboards, billing, docs, prior numbers. Replace any guess with data you can find. Ask up to 3 questions only for anchors tools cannot supply.
3. Light path. Small ask: 3-4 factors, one range each, a result line and one cross-check.

Steps

1. Decompose

Break the quantity into factors you can estimate, usually a product: population x frequency x size, or rate x time. Write the formula first.

2. Estimate

For each factor give a low and high and a one-line basis. Mark guesses [ESTIMATED]; mark found data with its source.

3. Combine

Multiply lows and highs for bounds. For a single central value, take the geometric midpoint (the square root of low x high), which suits ranges that span powers of ten. Report the result as a range and an order of magnitude.

4. Cross-check

Estimate the same quantity a second way (top-down vs bottom-up, or compare to a known similar system). If the two differ by more than about 3x, find which factor is off.

5. Sensitivity

Name the one or two factors that move the answer most, and what measurement would narrow them.

Pitfalls

• False precision: "47,312 requests per second" from guessed inputs. Round to one significant figure.
• Unit mismatches (per day vs per second, bytes vs bits). Write units in every row.
• Double counting a factor that appears in two inputs.
• Anchoring on the first number you thought of. Estimate the low and high first, then the middle.
• Skipping the cross-check, which is what separates an estimate from a guess.
• Forgetting peaks: averages hide the busiest hour. State average and peak when sizing capacity.

Worked example: references/example.md.

Checklist

• Quantity, units, purpose and needed accuracy stated
• Formula written before numbers
• Each factor has low, high, basis; guesses marked [ESTIMATED]
• Result as a range and order of magnitude
• Cross-checked a second way
• Dominant factor named, with the measurement that would narrow it