# What are TAM, SAM and SOM? > **TAM, SAM, SOM:** TAM, SAM and SOM are three nested estimates of market size: the total demand for a product (TAM), the part your offer and channels can reach (SAM) and the share you can realistically win (SOM). - Source: https://ai-presentations.com/glossary/tam-sam-som/ - Updated: 21 October 2026 - Language: English - German version: https://ai-presentations.com/de/glossar/tam-sam-som/ Also called: total addressable market, serviceable available market, serviceable obtainable market **TAM, SAM and SOM** size a market in three nested steps, from everyone who could buy to the share you can realistically win. - **TAM (total addressable market)** is the revenue you would earn if every possible customer for your type of product bought from you. - **SAM (serviceable available market)** is the part of the TAM that your product, price, region and sales channels can actually reach. Some sources write "serviceable addressable market"; it is the same figure. - **SOM (serviceable obtainable market)** is the share of the SAM you can realistically win in a set period, given competition and your capacity to sell. SOM is smaller than SAM, and SAM is smaller than TAM. Investors read the three numbers to judge whether the market is big enough and whether the plan for winning part of it is believable. ## A worked example A software company that automates month-end reconciliation sizes its market in three steps. The figures are invented, and each number comes with its scope: | | Scope | Size | | --- | ------------------------------------------------------- | ------- | | TAM | Finance automation spend, mid-market, EU and UK | €11.8bn | | SAM | Reconciliation and close for firms with 50 to 500 staff | €3.4bn | | SOM | Five-year target: 4,000 customers at €24,000 a year | €96m | The SOM comes from a plan, not a percentage: 4,000 × €24,000 = €96m, which is 2.8% of the SAM. *TAM, SAM and SOM as a funnel, each with its scope in words. Example with invented numbers.* 4. A €3.4bn serviceable market in Europe alone ## How to size a market 1. **Define the unit.** Write one sentence on who buys what, and count exactly that. 2. **Build bottom-up.** Multiply the number of target customers by the yearly price per customer. Use a top-down figure from an industry report as a cross-check, not as the main number. 3. **Write the scope under each number:** region, company size, product. Anyone should be able to challenge the line. 4. **Derive the SOM from your capacity to sell:** sales reps, partners, conversion rates and the time it takes to win a deal. 5. **Name the source and the year** for every count. ## Market size on slides Use one market slide with three numbers, the scope in words and a source line. Put the number you want remembered in the title, as in "A €3.4bn serviceable market in Europe alone". The [pitch deck checklist](https://ai-presentations.com/tools/pitch-deck-checklist/) helps you check the whole deck, and the [pitch deck template](https://ai-presentations.com/templates/pitch-deck/) includes a market slide. ## Typical mistakes - **The "1% of the market" argument.** "If we win just 1% of €11.8bn, that is €118m" says nothing about how you would win that 1%. - **A TAM that counts everyone.** A product for firms with 50 to 500 staff does not address freelancers. - **SAM equal to TAM** because "everyone could use it". - **Mixed units,** with customers in one row and revenue in the next. - **No source or no year** behind the counts. The SOM only becomes a revenue plan when it meets [unit economics](https://ai-presentations.com/glossary/unit-economics/): what a customer pays and what it costs to win one. ## Frequently asked questions ### What is the difference between TAM, SAM and SOM? TAM is the total demand for your type of product. SAM is the part of it that your product, region and channels can serve. SOM is the part of the SAM you can realistically win in a set period. Each figure is smaller than the one before. ### Should I calculate TAM top-down or bottom-up? Bottom-up is more convincing: the number of potential customers times the yearly price per customer. A top-down estimate, which starts from an industry report, works as a cross-check. A market size that is only a share of a large number leaves the reader guessing how you would win it. ### How big should the SOM be? There is no fixed share of the SAM. The SOM should follow from your plan: how many customers your sales channels can win in the period, times the price. If you cannot explain the SOM as a customer count, it is a guess. ### Where do TAM, SAM and SOM go in a pitch deck? On one market slide, usually after the problem and solution slides. Show the three numbers with their scope in words and add a source line. ## Related pages - [Unit economics](https://ai-presentations.com/glossary/unit-economics/): Unit economics show whether one customer earns more than it costs to win and serve. Learn the core metrics, the formulas and a worked example you can copy. - [ARR](https://ai-presentations.com/glossary/arr/): ARR is the yearly value of a company's recurring subscription revenue at a point in time. Learn the formula, what counts and see a worked ARR roll-forward. - [Pitch deck](https://ai-presentations.com/templates/pitch-deck/): Ten slides for a seed round: problem, solution, market, traction, unit economics, competition, team and the ask. A pitch deck template with a worked example. - [Business plan](https://ai-presentations.com/templates/business-plan/): A business plan presentation template with 10 slides: summary, problem, customers, model, revenue, profit and loss, use of funds, milestones and the ask. - [Investor update](https://ai-presentations.com/templates/investor-update/): An investor update template with 9 slides: summary, metrics, ARR bridge, plan against actual, lessons, cash and runway, next-quarter plan and asks. - [Pitch deck checklist](https://ai-presentations.com/tools/pitch-deck-checklist/): Free pitch deck checklist for pre-seed, seed and Series A: tick off what each slide must answer, see your progress and turn the gaps into a brief for your deck. --- ai-presentations.com is published by Slaide (https://www.slaide.de), a sole proprietorship run by Nathalie Scholl in Heilbronn, Germany. [How this site is written, checked and corrected](https://ai-presentations.com/editorial-policy/).