What TAM stands for? How can I know the total addressable market (TAM) for my company? How is TAM different with serviceable available market (SAM) and serviceable obtainable market (SOM)? How to calculate TAM SAM SOM and your market? What is the TAM SAM SOM formula for a startup? How is TAM related to the potential market? What is market size or sizing? Is there a template for TAM? Do I need TAM for my pitch deck?
We’ve helped hundreds of our clients calculate and analyzed their TAM for their business, product, and services. It helps them understand how big their market is, or is there a potential market share waiting for them in their industry line. Most often, if you’re a startup and presenting a pitch deck to potential investors, the TAM is one of the essential keys the investor would be looking to understand the revenue opportunity and to help them decide whether to invest or not to invest.

TAM SAM SOM acronyms and definition
TAM, SAM, and SOM are acronyms that represents different subsets of a market.
- TAM or Total Addressable Market is the total market demand for a product or service.
- SAM or Serviceable Available Market is the segment of the TAM targeted by your products and services which is within your geographical reach.
- SOM or Serviceable Obtainable Market is the portion of SAM that you can capture.
TAM SAM SOM: Do they matter for a startup?
You are a startup. You are starting your business. You need funding. You want your company to grow. Put yourself in an investor’s shoes. You need to deliver a target return to your own investors which implies both de-risking the investment early (i.e. figuring with the minimum possible of capital if the start-up has a market) and investing in opportunities which offer substantial upside potential (i.e. huge market size).
The SOM and SAM help de-risking the investment while the TAM enables to assess the upside potential. The Serviceable Obtainable Market (SOM) is your short term target and therefore the one that matters the most: if you cannot succeed on a fraction of the local market chances are that you will never capture a large part of the global market.
As an investor, I expect you to have a realistic objective and I will judge you on your ability to deliver that objective.
To be realistic your SOM needs to factor in:
- your product: people will want to buy your goods
- your marketing plan and the identified distribution channels: you have a clear plan to reach a large portion of your target customers
- your SAM and the strength of your competition: chances are that you are not going to take 50% market share within 6 months. Therefore your SOM needs to be a reasonable fraction of your Serviceable Available Market.
For the investor the ability to reach your SOM means that he will not lose his shirt. In that context SAM acts as a good sanity check to assess the likelihood of achieving the market share implied by the Serviceable Obtainable Market and as a proxy for the short term upside potential of your business.
If you can deliver SOM in time then you are capable and credible, and you might be able to increase the market share and reach a more important penetration of the SAM which would deliver a good return on investment.
Let’s dive into more details with actual examples of what the above are and how it applies to a product, service, or business.
So how to calculate TAM SAM SOM to size the market?
Total Addressable Market (TAM)
Total addressable market (TAM), also referred to as total available market, is a form of determining the potential size of a market that enables a business to define the holistic revenue opportunity offered from its product or service. It is an exercise that will shed light towards the level of effort and funding to be put into a new business line, because it provides guidelines about the munificence of its economic potential. Nowadays, a TAM has become an important metric and a more creative process of calculating it has emerged due to the increased speed in which new markets are evolving.

How can I know the total addressable market (TAM) of my product or services? Is there a formula? (TAM SAM SOM)
There is no standard formula for calculating the TAM. It differs from every product, services, and business.
1. Understand your target audience (TAM SAM SOM)
Who are your buyers? Who will use your services? What are their demographics? Who are they? Where are they?
2. Analyze the current statistics of your target market (TAM SAM
Where should I get figures and data? What’s the total number of my target audience? Where are they located? See example below.
Total companion animal (dog or cat) pet owners: 67% of U.S. households, or about 85 million families own a pet, according to the 2019-2020 National Pet Owners Survey conducted by the American Pet Products Association (APPA). Of these, 63.4 million owns a dog and 42.7 million have a cat in their household, however, it is possible that these dog owners also own a cat. Here, we will assume the bigger number, thus, your total target audience is 63.4 million companion animal pet parents.
3. Incorporate your business pricing model (TAM SAM SOM)
Assuming that your MSRP (including landed cost) is $458 per product. Then your TAM value would look like below.
Total Addressable Market (TAM) Value
= Total number of companion animal pet owners in the US * MSRP (including landed cost)
= 63.4 million * $458
= $29 billion
T

Serviceable Available Market (SAM)
Serviceable Available Market is the segment of the TAM targeted by your products and services which is within your geographical reach. It is the segment of your TAM which you can reach or achieve.
Serviceable Available Market (SAM) Value
= 22.50 million * $458
= $10 billion

Serviceable Obtainable Market (SOM)
Serviceable Obtainable Market (SOM) Value
= 21.1 million * $458
= $9 billion

Are you a startup or a business owner, entrepreneur, or founder looking for investors?
Presenting a pitch deck to seek funding from investors for your startup is a BIG STEP.
I am here to help you with that. Besides, I’ve been doing market research analysis for hundreds of business owners, I’ve developed and created a template that will surely catches attention of investors. You can message me so I could provide you a link for my reviews on other sites.
The template is provided in Microsoft Presentation (pptx) format and is already designed on what you should put on your pitch deck presentation. I have provided those topics that you should include and are already arranged accordingly. You just need to adjust according to your actual business information.
Upon purchase (via Etsy), you will be able to download 2 kinds of files:
- A designed pitch deck presentation template that is blank with instructions. You can change the background, text format, etc according to your preference.
- An actual sample pitch deck presentation for your reference.
GO GET THAT TEMPLATE AND START ATTRACTING INVESTORS!

What is the actual market size? (TAM SAM SOM)
Do you want more realistic examples? Learn from below actual market sizing and TAM analysis.
Total addressable market (TAM), SAM and SOM:
- Global virtual events market and TAM
- Mobility as a Service (MaaS) Market Size
- Affiliate Marketing: Market Size and Total Addressable Market
- Coin Collecting Market Analysis: How Many Coin Collectors In The World?
- Global virtual events market is growing annually by 22%
- Startup incubator market in the Middle East and North Africa (MENA) region
Market sizing and market trends:
- E-commerce sellers worldwide is 46.75 million and their accounting market size is $2 billion
- Photography Services, Portrait and Commercial, generated annual revenue of $36 billion
- Affiliate Marketing: Market Size and Total Addressable Market
- Coin Collecting Market Analysis: How Many Coin Collectors In The World?
- Global virtual events market is growing annually by 22%
- Australian Professional Lending Services Market Size
- General Practitioner Clinics in Australia
- Luxury Cruise Industry Market Size and SWOT Analysis
- Startup incubator market in the Middle East and North Africa (MENA) region
- Automotive Retail Sales Projections and Market Size
- Mobility as a Service (MaaS) Market Size
- United States Telemedicine Market Size: Medicaid and Medicare Spending
One thought on “TAM SAM SOM: HOW TO CALCULATE YOUR MARKET”