marketing
TAM / SAM / SOM
Market sizing framework: Total Addressable Market, Serviceable Available Market, Serviceable Obtainable Market.
Definition
TAM / SAM / SOM is a market-sizing framework: TAM (Total Addressable Market) is total demand if you could serve every possible customer; SAM (Serviceable Available Market) is the slice you can realistically reach given product, geography, and channel; SOM (Serviceable Obtainable Market) is what you can realistically capture in 3-5 years. Used in business plans and investor pitches to size opportunity. Common misuse: inflated TAM ('$50B market!') with no actual SAM/SOM math. Investors care about SOM - the realistic 3-5 year revenue.
In your business
- →Calculate all three - TAM alone is investor theater, SOM is the number that actually matters
- →Build SOM bottom-up - target accounts x average deal size x realistic win rate
- →Re-estimate annually - markets shift, your reach shifts