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.
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.
| 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 |