Market Sizing

Determining the size of the pie your company is taking a slice out of can quickly become an exercise in grandeur. That being said, having a standard, top-down market sizing model will often be one of the first steps when analyzing a new opportunity. Definitions: TAM – Total Addressable Market: the full revenue opportunity if you captured 100% of every potential customer globally. SAM – Serviceable Addressable Market: the slice of TAM you can realistically reach given your geography, segment focus, and go-to-market. SOM – Serviceable Obtainable Market: the portion of SAM you can realistically capture in the near term given competition and execution. Like any standard funnel, the primary drivers are the volume at the top and the throughput at each level. Let this be a check against your proposed investment in a project rather than your pricing strategy.