TAM/SAM/SOM is a market sizing framework. TAM (Total Addressable Market) is the full market if you had 100% share. SAM (Serviceable Addressable Market) is the segment you can reach. SOM (Serviceable Obtainable Market) is your realistic near-term capture.
Business cases, investment decisions, roadmap prioritisation across opportunities, and when presenting to leadership or investors.
- TAM: Total global market for this category — use both top-down (industry reports) and bottom-up (customers × spend)
- SAM: Portion of TAM you can actually serve given geography, product fit, and go-to-market
- SOM: Realistic capture in 1-3 years given resources and competition
- Sanity check: SOM should be 1-5% of SAM for early-stage products
- Document your assumptions explicitly — they matter more than the numbers
TAM = global music consumption spend (~$25B streaming market). SAM = markets where smartphone penetration and disposable income support a subscription model. SOM = Spotify's realistic subscriber growth in a new market like India in year 1-2, accounting for price sensitivity and local competition. Each layer requires different pricing and product decisions.
Please contact the author for more information on these examples at linkedin.com/in/kshitijrege
- Using only top-down analysis — bottom-up estimates are more credible
- Confusing TAM with SAM — be realistic about who you can actually reach
- Forgetting that SOM must account for sales cycle, pricing, and competition
- Zero to One — Peter Thiel
- The Lean Startup — Eric Ries