TAM vs SAM vs SOM
These three market-sizing figures narrow from the theoretical maximum down to what a business can realistically capture. Investors expect all three, not just the biggest, most impressive number.
TAM
The total revenue opportunity available if a business achieves one hundred percent market share for its product or service. It equals maximum revenue potential if the entire market were captured.
SAM
The portion of the total addressable market that a business can actually target and serve based on its geography, technology, and business model.
SOM
The specific portion of the serviceable addressable market that a business can realistically capture, especially in the short term. It reflects current operational capacity and resource limits.
Total demand for a product category if everyone who could buy it did
The portion of TAM reachable given your business model and geography
The portion of SAM you can realistically win given competition and resources
Largest
Middle
Smallest, most realistic
Showing the size of the opportunity
Showing a realistic addressable slice
Showing near-term revenue potential
| Definition | Total demand for a product category if everyone who could buy it did | The portion of TAM reachable given your business model and geography | The portion of SAM you can realistically win given competition and resources |
|---|---|---|---|
| Typical size | Largest | Middle | Smallest, most realistic |
| Used for | Showing the size of the opportunity | Showing a realistic addressable slice | Showing near-term revenue potential |