TAM / SAM / SOM
Size your market with precision: from total market to the share you can actually capture.
What do TAM, SAM and SOM mean?
TAM (Total Addressable Market), SAM (Serviceable Addressable Market), and SOM (Serviceable Obtainable Market) are three levels of market sizing used to evaluate the commercial potential of a company or product. Each level progressively refines the estimate.
TAM represents the total demand for a product or service in a given market, without any constraints. SAM restricts this estimate to segments your company can effectively serve, given your offering and geography. SOM is the share of SAM you can reasonably capture in the short term, considering your operational capacity and competition.
This triptych has become a standard in business plans, fundraising, and strategic plans. It allows leaders and investors to distinguish ambition (TAM) from realistic targets (SOM), avoiding projections disconnected from market reality.
How to calculate TAM, SAM and SOM?
Calculate TAM (top-down or bottom-up approach)
Top-down: start from existing market studies and industry data. Bottom-up: multiply total potential customers by average revenue per customer. Cross-reference both approaches for reliable results.
Refine SAM with your constraints
Restrict TAM by your geographic zone, target segment, distribution channels, and product features. SAM answers the question: 'Who could buy our product as it exists?'
Estimate SOM realistically
Apply your current or target market share to SAM. Consider competition, sales resources, brand awareness, and production capacity. SOM is your achievable revenue target.
Validate with market data
Compare your estimates against industry reports, competitor public data, and growth trends. An unsourced TAM/SAM/SOM loses all credibility with investors.
The 3 market levels
Obtainable market
Klarvon automates your market sizing
Klarvon automatically calculates your TAM, SAM and SOM by cross-referencing industry databases, public market reports, and financial data from comparable companies. Our AI estimates the number of potential customers, average revenue per segment, and applies relevant geographic and sector filters. Each figure comes with its source and calculation methodology.
Complementary frameworks
Explore other strategic analysis frameworks to enrich your vision.
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