Module 9: Market Sizing (TAM, SAM, SOM, TTAM)

March 19, 2024 2 mins read

Market sizing is more than a pitch deck requirement. Once you’ve worked out it’s BIG, it becomes an internal guide for every feature, expansion play, and strategic decision.

Sizing your market might feel a touch impractical, but it’s about the story it tells, the reality it cloaks and the future it hints at. This process unfolds in the framework of acronyms: TAM, SAM, SOM & TTAM complimented with a fab dose of SWAG (Scientific Wild Ass Guess).

Dismissing the criticality of market sizing reflects a tragic misunderstanding of its significance. It’s the start of the only thing that matters, securing customers one by one by one.

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    Market sizing, with its acronyms TAM, SAM, and SOM, feels like a moving target. Perspectives vary, opinions are wide, top-down or bottom-up, customer numbers or market value.

    The top-down approach is often inevitable (total market spend) at the beginning, guiding your strategy until your model, pricing, and roadmap have enough clarity to go bottom-up and identify, prioritize and build for near term growth.

    TAM (Total Addressable Market): The widest possible market for your product.

    SAM (Serviceable Available Market): The portion of TAM accessible with your product as it stands.

    SOM (Serviceable Obtainable Market): The part of SAM you can capture in the near term with existing resources.

    TTAM (True Total Addressable Market): The realistic market size before you added a zero. The one you are truly truly building into.

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