TAM (Total Addressable Market) is the total revenue opportunity if you captured 100% of the market. SAM (Serviceable Addressable Market) is the portion of TAM you can reach with your current business model. SOM (Serviceable Obtainable Market) is the portion of SAM you can realistically capture in 3-5 years.
TAM shows the vision. SAM shows the strategy. SOM shows the execution plan. Investors want to see all three.
Top-Down TAM
TAM = Industry Revenue × Relevant Segment %
Start from industry reports and narrow to your segment.
Top-Down SAM
SAM = TAM × Geographic Filter × Customer Type Filter × Price Point Filter
Top-Down SOM
SOM = SAM × Realistic Market Share (typically 1-5% in first 3 years)
MedTech Top-Down Example
TAM: Global 3D ultrasound market = €2.1B SAM: Europe + accessible APAC markets, hospital segment = €850M SOM: 2% market share in 5 years = €17M
Key Takeaways
- TAM = total opportunity. SAM = reachable market. SOM = realistic capture.
- Top-down starts from industry data and narrows with filters.
- SOM is typically 1-5% of SAM for startups in first 3-5 years.
- Always show the filters/assumptions behind each number.