Strategy & Planning
TAM/SAM/SOM (Market Sizing)
TAM (Total Addressable Market), SAM (Serviceable Addressable Market), SOM (Serviceable Obtainable Market) breaks down market opportunity into realistic segments. Essential for planning and investing.
When to Use This Framework
Identifying market opportunities
Investment planning
Growth target setting
Risk assessment
How to Apply This Framework
- 1
Define TAM (all possible customers)
- 2
Calculate SAM (market you can serve)
- 3
Forecast SOM (realistic year 1 revenue)
- 4
Research market sizes
- 5
Consider geographic factors
- 6
Account for competition
Real-World Examples
Notion TAM: all knowledge workers
SAM: English-speaking countries
SOM: First year revenue target
Year 5 expansion
Strengths
- Realistic market sizing
- Guides investment decisions
- Shows growth potential
Limitations
- Estimates can be very wrong
- Market definition disputes
- Requires significant research
Related Frameworks
Consider combining this framework with:
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