TAM/SAM/SOM Calculator
Calculate your Total Addressable Market, Serviceable Addressable Market, and Serviceable Obtainable Market. Essential for pitch decks, business plans, and market analysis.
The total revenue opportunity for your product category
The portion of TAM your product/service can serve
The realistic share of SAM you can capture
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How to Calculate TAM, SAM, and SOM
TAM/SAM/SOM analysis is a framework used by founders, investors, and analysts to quantify the revenue opportunity in a given market. Understanding these three metrics helps you set realistic growth targets and communicate market opportunity to stakeholders.
TAM (Total Addressable Market)
TAM represents the total demand for your product if you could capture 100% of the market with no constraints. To calculate TAM, you can use a top-down approach (industry reports, analyst estimates) or a bottom-up approach (number of potential buyers multiplied by average annual spending).
SAM (Serviceable Addressable Market)
SAM narrows TAM to the segment you can actually serve with your current product, business model, and geographic reach. For example, if your product is only available in English, your SAM would exclude non-English-speaking markets.
SOM (Serviceable Obtainable Market)
SOM is the portion of SAM you can realistically capture in the short to medium term, considering competition, brand awareness, distribution channels, and your sales capacity. This is typically the number you use for near-term revenue projections.
Frequently Asked Questions
- What is TAM (Total Addressable Market)?
- TAM represents the total revenue opportunity available for a product or service if you achieved 100% market share. It's the entire market demand for your product category, without any constraints on geography, competition, or distribution.
- What is the difference between TAM, SAM, and SOM?
- TAM is the total market demand. SAM (Serviceable Addressable Market) is the portion of TAM that your product or service can actually serve, based on your business model, geography, and capabilities. SOM (Serviceable Obtainable Market) is the realistic share of SAM you can capture in the near term, given competition and resources.
- How do I calculate TAM for my startup?
- There are two main approaches: Top-down (start with industry research data and narrow down to your segment) and Bottom-up (multiply the number of potential customers by average revenue per customer). For investors, combining both approaches adds credibility to your estimates.
- What is a good SAM percentage of TAM?
- This varies widely by industry. Typically, SAM ranges from 10% to 40% of TAM for most startups, depending on how niche your product is. A highly specialized product might only serve 5-10% of the total market, while a broadly applicable solution could serve 30-50%.
- Why do investors care about TAM/SAM/SOM?
- Investors use TAM/SAM/SOM to evaluate whether a market is large enough to support a venture-scale return. A large TAM shows opportunity, SAM shows your realistic reach, and SOM shows what you can achieve in the near term. Together, they demonstrate you understand your market and have realistic expectations.