TAM/SAM/SOM Analysis Template

DEFINITIONS

Understanding TAM/SAM/SOM

TAM/SAM/SOM DEFINITIONS

TAM (Total Addressable Market):
The total market demand for a product/service
= "If we had 100% market share, what's the revenue?"
Example: All companies that could use CRM software

SAM (Serviceable Addressable Market):
The portion of TAM you can actually target
= "What's the realistic market we can address?"
Example: Mid-market companies in North America
needing modern CRM

SOM (Serviceable Obtainable Market):
The realistic portion you can capture
= "What can we actually win in the near-term?"
Example: Companies we can reach with our current
sales and marketing capacity

RELATIONSHIP:
TAM > SAM > SOM (always)
TAM is aspirational
SAM is addressable
SOM is achievable

INVESTOR EXPECTATIONS:
☐ TAM: Show large opportunity ($1B+)
☐ SAM: Show focused strategy
☐ SOM: Show realistic projections

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TAM CALCULATION

Calculating TAM

TAM CALCULATION APPROACHES

APPROACH 1: TOP-DOWN
Industry Size Method

Step 1: Find total industry size
Industry: _______________
Total industry revenue: $_____________
Source: _______________
Year: _______________

Step 2: Apply relevant filters
Geographic filter: ____% = $_______
Segment filter: ____% = $_______
Use case filter: ____% = $_______

TAM = $_______________

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APPROACH 2: BOTTOM-UP
Customer Count Method

Step 1: Count total potential customers
Total companies globally: _______
That fit our criteria: _______

Step 2: Calculate revenue potential
Average contract value: $_______
Purchase frequency: _______

TAM = Customers × ACV × Frequency
TAM = $_______________

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APPROACH 3: VALUE THEORY
Value Creation Method

Step 1: Identify value created
Value per customer: $_______
Number of potential users: _______

Step 2: Calculate total value
TAM = Value × Users
TAM = $_______________

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FINAL TAM: $_______________
Method used: _______________
Confidence: High / Medium / Low

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SAM CALCULATION

Calculating SAM

SAM CALCULATION

Start with TAM: $_______________

Apply limiting factors:

GEOGRAPHIC LIMITS:
Regions we can serve:
☐ North America: ____% of TAM
☐ Europe: ____% of TAM
☐ APAC: ____% of TAM
☐ Other: ____% of TAM
Geographic SAM: $_______________

SEGMENT LIMITS:
Segments we target:
☐ Enterprise (>1000 emp): ____%
☐ Mid-market (100-1000): ____%
☐ SMB (<100 emp): ____%
Segment SAM: $_______________

PRODUCT LIMITS:
Use cases we address:
☐ Use case 1: _______________
☐ Use case 2: _______________
Product SAM: $_______________

CHANNEL LIMITS:
Customers we can reach:
☐ Inbound capacity: _______
☐ Outbound capacity: _______
☐ Partner reach: _______
Channel SAM: $_______________

FINAL SAM: $_______________
SAM as % of TAM: ____%

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SOM CALCULATION

Calculating SOM

SOM CALCULATION

Start with SAM: $_______________

Apply reality factors:

COMPETITION FACTOR:
Number of competitors: _______
Our expected share: ____%
Post-competition SAM: $_______________

AWARENESS FACTOR:
Brand awareness in market: ____%
Reachable market: $_______________

SALES CAPACITY:
Current sales headcount: _______
New logos per rep: _______
Average ACV: $_______
Max new revenue: $_______________

MARKETING CAPACITY:
MQL generation: _______
Lead-to-customer: ____%
Max marketing revenue: $_______________

EXECUTION FACTOR:
Historical win rate: ____%
Growth trajectory: ____%
Realistic capture: $_______________

FINAL SOM: $_______________
SOM as % of SAM: ____%
SOM as % of TAM: ____%

TIMELINE:
Year 1 SOM: $_______________
Year 3 SOM: $_______________
Year 5 SOM: $_______________

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VALIDATION & PRESENTATION

TAM/SAM/SOM Validation

VALIDATION CHECKS

SANITY CHECKS:
☐ Is TAM credibly large? (>$1B for VC)
☐ Is SAM focused enough?
☐ Is SOM achievable with current resources?
☐ Is the ratio reasonable? (SOM ~1-5% of SAM)

INVESTOR QUESTIONS TO PREPARE FOR:
☐ How did you calculate TAM?
☐ What's your source for market size?
☐ Why is SAM that percentage of TAM?
☐ How will you capture SOM?
☐ What's your path from SOM to SAM?

RED FLAGS TO AVOID:
☐ TAM too small (<$500M)
☐ SAM = TAM (no focus)
☐ SOM unrealistic (>10% of SAM Year 1)
☐ No sources cited
☐ Outdated data

BENCHMARK RATIOS:
SAM as % of TAM: 10-40% typical
SOM as % of SAM: 1-10% typical
Year 1 SOM: $1-10M for early stage

TAM/SAM/SOM Visual Presentation

TAM/SAM/SOM SLIDE FORMAT

[COMPANY] MARKET OPPORTUNITY

┌─────────────────────────────────────┐
│                                     │
│            TAM: $___B               │
│    "Total market for [category]"    │
│                                     │
│    ┌───────────────────────┐        │
│    │                       │        │
│    │      SAM: $___M       │        │
│    │  "Our addressable     │        │
│    │   market segment"     │        │
│    │                       │        │
│    │   ┌───────────┐       │        │
│    │   │           │       │        │
│    │   │ SOM:$__M  │       │        │
│    │   │           │       │        │
│    │   └───────────┘       │        │
│    │                       │        │
│    └───────────────────────┘        │
│                                     │
└─────────────────────────────────────┘

WHY THIS MATTERS:
"Large TAM ensures room to grow.
Focused SAM shows strategic clarity.
Realistic SOM demonstrates execution."

Summary Table

Market	Size	Calculation	Source	Confidence
TAM	$___B	[method]		H/M/L
SAM	$___M	[method]		H/M/L
SOM	$___M	[method]		H/M/L

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