Market Size Calculator (TAM SAM SOM)

TAM (Total Addressable Market) is the total revenue opportunity available if you captured 100% of the market. SAM (Serviceable Addressable Market) is the segment of TAM you can realistically target given your product scope, geography, and go-to-market strategy. SOM (Serviceable Obtainable Market) is the portion of SAM you can realistically capture in the short term based on your current resources, team size, and competitive position.

TAM represents the entire market demand for your product or service if there were no limitations. SAM narrows that down to the portion you can actually serve based on factors like geographic reach, product fit, pricing tier, and distribution channels. For example, if TAM for project management software is $10B globally, your SAM might be $1.5B if you only target English-speaking SMBs in North America.

There are two main approaches. Top-down uses industry reports and narrows them by your segment—but this often inflates numbers. Bottom-up is more reliable: estimate how many potential customers exist, multiply by what they'd pay annually, and you get TAM. For example, 500,000 target businesses × $200/year average spend = $100M TAM. WorthBuild uses a bottom-up approach combining real competitor traffic data and funding totals for more traceable estimates.

Start with your TAM, then apply filters for your realistic reach: geographic limitations, customer segments you actually serve, pricing tiers that match your product, and channels you can access. A common formula is TAM × percentage addressable. If your TAM is $100M and you can realistically reach 30% of that market through your channels and positioning, your SAM is $30M.

SOM is your realistic short-term capture of SAM. Factor in your current market share (or expected share for new entrants), competitive landscape, sales capacity, and growth rate. Early-stage startups typically estimate SOM at 1-5% of SAM in the first few years. If your SAM is $30M and you expect to capture 3% in year one, your SOM is $900K.

Investors use TAM to assess whether the opportunity is large enough to generate venture-scale returns. SAM shows you understand your realistic target market rather than claiming you'll capture everything. SOM demonstrates you have a grounded plan for near-term revenue. A startup that only shows TAM looks naive—showing all three proves you understand the market and have a realistic path to growth.

For venture-backed startups, most VCs look for a TAM of at least $1B to ensure the market is large enough for a significant return. For bootstrapped or small businesses, a TAM of $100M+ can be perfectly viable. What matters more than the raw number is that the TAM is growing, that your SAM is a meaningful slice, and that you can credibly capture your SOM within your runway.

The most common mistakes are: using top-down numbers from industry reports without narrowing to your actual segment; conflating TAM with SAM (claiming the entire market is your target); ignoring competitor density when estimating SOM; using outdated data; and not showing your work. Investors and advisors want to see traceable assumptions, not a single number pulled from a report.