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. 1

    Define TAM (all possible customers)

  2. 2

    Calculate SAM (market you can serve)

  3. 3

    Forecast SOM (realistic year 1 revenue)

  4. 4

    Research market sizes

  5. 5

    Consider geographic factors

  6. 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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