TAM, SAM, SOM

Total, serviceable and obtainable market: sizing how big the opportunity really is.

Also known as: TAM SAM SOM, market sizing, addressable market

TAM/SAM/SOM sizes an opportunity in three shrinking circles: TAM (total addressable market — everyone with the problem, worldwide), SAM (serviceable — the slice you can reach with your product and channels), SOM (obtainable — what you can realistically capture in a few years). Each step down should shrink the number honestly; a SOM that equals the TAM is a confession of no thinking.

TAM:  all SMEs globally with inventory pain ($40B software spend, e.g.)
SAM:  Indonesian SMEs reachable online in your categories ($1.2B, e.g.)
SOM:  what 200 sales-led deals/year wins in 3 years ($18M, e.g.)

Investors use it to test venture-scale and intellectual honesty; founders should use it to test themselves. Bottom-up sizing (customers × price × reachable share) beats top-down (tiny % of a giant number) because its assumptions are checkable one by one.

The classic mistakes:

Top-down percentages. “1% of a $100B market” — the laziest sentence in pitching. It assumes distribution, competition and adoption away. Build bottom-up or do not bother.
TAM as the headline. Huge TAMs impress nobody; every failed startup had one. Lead with SOM and how you win it — reachable beats enormous.
Static numbers. Markets move with regulation, platforms and crises. Date your sizing and revisit when the world shifts (why now).
Counting non-buyers. Including everyone “with the problem” regardless of budget or buying behavior inflates every circle. Only people who can and do pay count.

The honest version: bottom-up, dated, with named assumptions per circle — and a beachhead small enough to dominate first. See venture-scale for what the answer implies about funding.