TAM: total addressable market
Everyone who could buy what you sell, times what they would pay in a year. It shows the ceiling: how big the company could get if it won everything.
customers × annual revenue per customer
Everyone who could buy, worldwide. Airbnb counted trips: 2 billion booked a year.
What one customer pays you. Airbnb's 10% fee came to about $25 a trip.
An industry figure. Name the source and year on your slide.
Limit by the segment, price point, geography and channel you actually sell to.
Check it against how many customers your channels and team can close.
- TAM
- SAM
- SOM
Paste it into Claude or ChatGPT with the Pitch Unfairly plugin and it builds this slide in your deck, with the math showing.
TAM, SAM and SOM, explained
SAM: serviceable available market
The part of TAM your product, price, geography and channels can actually serve today. Airbnb's SAM was budget trips booked online, not every trip.
TAM × share you can serve
SOM: serviceable obtainable market
The share of SAM you can win in three to five years. It is the number your plan has to earn, so build it from channels and sales capacity, not a hopeful percentage.
SAM × share you can win
Worked example
Airbnb's 2009 market slide
Airbnb's seed deck sized its market in trips: 2 billion booked worldwide, 560 million of them budget trips booked online, and 84 million it could win, 15% of that. At a 10% fee, about $25 a trip, those 84 million trips meant $2.1 billion a year.
The calculator above starts from those numbers. Our rebuild of the deck lets you drag the share and watch the revenue change, because on a market slide the math is the pitch.
Market sizing mistakes investors flag
- A research-report TAM with no path to it. A big number from a report says nothing about who buys from you.
- "If we get just 1% of the market." A SOM picked as a percentage instead of built from customers you can name and reach.
- A SAM the same size as the TAM. If nothing narrows it, you have not said who you serve first.
- Mixed units. Users in one circle, dollars in the next. Pick one unit, then convert at the end.
- No source or date. Every starting number needs one on the slide.
TAM SAM SOM questions
What do TAM, SAM and SOM stand for?
Total addressable market, serviceable available market and serviceable obtainable market. They size the same market three times, from everyone who could buy down to the customers you can realistically win.
How do you calculate TAM?
Bottom-up: count the customers who could buy and multiply by what each pays in a year. Top-down: start from an industry figure and narrow it. Bottom-up is easier to defend because every number can be checked.
What is the difference between TAM, SAM and SOM?
TAM is total demand for what you sell. SAM is the part your product, price and reach can serve today. SOM is the share of SAM you can win in the next three to five years with the channels and team you plan to have.
Should I use top-down or bottom-up market sizing?
Lead with bottom-up. Investors can check a customer count and a price; a slice of a research firm's number tells them little. Use a top-down figure only as a sanity check.
What is a realistic SOM?
One you can trace to how you will sell: how many customers your channels and sales capacity can reach and close in the time frame. A round percentage of a big market, with no path behind it, is the number investors push back on.
Does a bigger TAM make a better pitch?
Only up to a point. The TAM has to be large enough to support a big company, but investors decide on whether your SAM and SOM are believable, not on the size of the outer circle.
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