Understanding TAM, SAM, SOM
Market sizing is crucial for understanding your startup’s potential. The TAM-SAM-SOM framework helps you estimate realistic market opportunities.
TAM (Total Addressable Market)
The total market demand for a product or service if you had 100% market share. This represents the maximum possible revenue opportunity.
SAM (Serviceable Addressable Market)
The portion of TAM that your specific product or service can serve. This accounts for geographic, demographic, or other limitations.
SOM (Serviceable Obtainable Market)
The realistic portion of SAM you can capture. This considers competition, resources, and go-to-market strategy.
Why It Matters
- Helps investors understand opportunity size
- Guides resource allocation decisions
- Sets realistic growth expectations
- Validates market viability