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Strategy & Funding

TAM / SAM / SOM

Size your market top-down: total, serviceable, and honestly obtainable.

Your numbers

$M
%
%

Results

SAM
400 $M
The market your product and channels can actually reach
SOM
20 $M
The revenue opportunity you can defend in a pitch
SOM as share of TAM
1%
How small the obtainable slice really is next to the headline number

How it works

SAM = TAM × the share you can actually serve. SOM = SAM × the share you can realistically win.

TAM is everyone who could conceivably buy the category. SAM narrows to the segment your product, geography, and channel can actually reach. SOM is the slice of SAM you can plausibly capture in the next few years, given competition and your resources — the only one of the three you can be held accountable to.

The classic mistake is pitching TAM as if it were your revenue plan ("if we get just 1% of a $50B market..."). Top-down sizing is a sanity check; make the SOM defensible bottom-up — customers × price — or don't put it on the slide.

Worked example

The category is worth $2,000M (TAM). Your product serves 20% of it — SMBs in your geography — so SAM = $400M. You can credibly win 5% of that in 3–5 years: SOM = $20M. Note that's 1% of the headline TAM — which is why investors ignore the big circle and interrogate the small one.