Size your market with bottom-up and top-down methods. Funnel visualization, growth projections, and investor-readiness scoring.
Market Inputs
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SAM — % of TAM you can serve
%
SOM — % of SAM you can capture
%
Top-Down Method
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%
%
Growth Projections
%
yr
Market Segments
Competitive Position
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Enter your market data and click calculate to see TAM, SAM, and SOM
TAM
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total addressable
SAM
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serviceable addressable
SOM
$0
serviceable obtainable
Market Funnel
SAM : TAM
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SOM : SAM
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SOM : TAM
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Methodology Comparison
Growth Projection
TAM
SAM
SOM
Investor-Readiness Score
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Investor Readiness
What Is TAM SAM SOM?
TAM, SAM, and SOM are three concentric measures of market opportunity that help founders, product managers, and investors understand how big a business can realistically become.
TAM (Total Addressable Market) is the total revenue opportunity available if a product achieved 100% market share. It represents the entire demand for a product or service.
SAM (Serviceable Addressable Market) is the portion of TAM that your product can realistically serve, given constraints like geography, customer segment, language, or technical reach.
SOM (Serviceable Obtainable Market) is the share of SAM you can realistically capture in the near term, based on your competitive position, go-to-market capacity, and sales cycle.
How to Calculate TAM SAM SOM
There are two primary approaches to market sizing, and the strongest analyses use both.
Bottom-Up Method starts with your specific customer and pricing:
TAM = Total Potential Customers × Average Contract Value
SAM = TAM × Serviceable Market Percentage
SOM = SAM × Obtainable Market Percentage
Top-Down Method starts with industry-level data:
TAM = Total Industry Revenue (from market research)
SAM = TAM × Relevant Segment Percentage
SOM = SAM × Expected Market Share Percentage
When both methods converge on similar numbers, it strengthens investor confidence. When they diverge significantly, it signals that assumptions need revisiting.
Bottom-Up vs Top-Down
Bottom-up analysis is grounded in customer-level data: how many potential customers exist and what they would pay. It tends to produce more defensible estimates because every assumption can be traced. Top-down analysis starts from industry reports and narrows downward. It provides useful context but can overestimate if the narrowing filters are too generous.
Investors generally weight bottom-up analysis more heavily because it demonstrates that you understand your customer. The ideal approach uses both methods to triangulate, then explains any variance between them.
Common Mistakes
Confusing TAM with revenue forecast. TAM is the theoretical ceiling, not what you will actually earn. Presenting TAM as a revenue projection is a red flag for investors.
Skipping the SAM filter entirely. Going straight from TAM to SOM without defining your serviceable market makes the analysis look lazy or uninformed.
Overly generous SOM assumptions. Claiming you will capture 20%+ of your SAM in year one is unrealistic for most startups. A defensible SOM is usually 1-5% of SAM in the early years.
Using only one methodology. A single method is a single point of failure. Using both bottom-up and top-down shows rigor.
Citing industry reports without narrowing. Saying your TAM is the entire global SaaS market ($300B) without narrowing to your specific segment undermines credibility.
Frequently Asked Questions
TAM (Total Addressable Market) represents the total revenue opportunity if you achieved 100% market share. SAM (Serviceable Addressable Market) narrows TAM to the segment your product can realistically serve. SOM (Serviceable Obtainable Market) is the portion of SAM you can realistically capture in the near term. Together, they form a market sizing framework used in investor decks, strategic planning, and product roadmaps.
Bottom-up: multiply the total number of potential customers by your average contract value (ACV). For example, 50,000 potential customers at $1,200/year = $60M TAM. Top-down: start with total industry revenue from market research and narrow by your relevant segment. Using both methods and showing how they converge gives investors the most confidence.
TAM is the entire market without constraints. SAM applies realistic filters: geography, customer segment, language, technical requirements, and other factors that limit who you can actually reach. For example, a project management SaaS might have a TAM of all businesses globally, but a SAM limited to English-speaking small businesses in North America that use cloud tools.
Investors look for a large TAM (typically $1B+ for venture-scale opportunities), a well-defined SAM that shows you understand your addressable segment, and a realistic SOM that demonstrates go-to-market awareness. They value bottom-up analysis over pure top-down because it shows customer-level understanding. Credibility comes from showing your work, not from big numbers.
For startups in years 1-3, a SOM of 1-5% of SAM is considered realistic and credible. Established companies may capture 10-20%. Claiming more than 20% of SAM as a startup will face skepticism. SOM should reflect your actual go-to-market capacity, competitive landscape, and sales cycle rather than aspirational growth.
Use both. Bottom-up gives you a grounded estimate based on your specific customer count and pricing. Top-down provides context from industry-level data. When both methods produce similar numbers, your estimate is more defensible. When they diverge by more than 2x, it usually means your assumptions need work in one or both approaches.
The most common mistakes are: treating TAM as a revenue projection, being too generous with SOM (claiming 20%+ of SAM in year one), using only one methodology, citing total industry size without narrowing to your segment, and not accounting for competitive dynamics. A strong market sizing exercise uses both methods, applies realistic filters, and shows its assumptions transparently.
You sized the market. Now write the PRD.
The PRD Generator skill takes your market sizing, user research, and competitive analysis and produces an investor-ready product requirements document.