Free tool
TAM SAM SOM Calculator
Build a market size from the bottom up — customers multiplied by price, then narrowed to what you can actually reach.
Market size built from customers and price rather than a slice of an analyst report, so every input is one you can defend.
- Potential customers worldwide
- Annual price per customer
- Serviceable share
- Obtainable share
Calculate market size
Example
Potential customers worldwide 50,000 · Annual price per customer $1,200
$60,000,000
Total addressable market
How it works
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1
Enter your numbers
Fill in potential customers worldwide, annual price per customer, serviceable share and obtainable share. Change a number and the answer updates.
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2
Press calculate market size
One button. Change any input afterwards and the answer updates as you type.
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3
Read the result
You get total addressable market, plus serviceable market, obtainable market.
What TAM, SAM and SOM mean
TAM is the total addressable market: every potential customer in the world multiplied by what they would pay annually. SAM is the serviceable portion you could sell to given your geography, language, segment and product. SOM is the share you could realistically win within a few years.
Each nests inside the one above. With 50,000 potential customers at $1,200 a year, TAM is $60m. If 30% are reachable, SAM is $18m. If you could win 10% of those, SOM is $1.8m.
Build it bottom-up, not top-down
Top-down sizing starts with an analyst report and claims a slice: "the market is $50bn and we only need 1%." Investors have heard it thousands of times and it signals that you have not done the work, because the 1% is arbitrary and the $50bn usually includes segments you will never touch.
Bottom-up sizing starts with countable things: how many organisations fit your profile, and what will they realistically pay. Every input is one you can source and defend, and the resulting number is smaller but survives scrutiny.
Choosing your percentages honestly
The serviceable share reflects real constraints today: which countries you can sell into, which languages you support, which company sizes your product actually fits. If you sell only in English to companies over 50 people, say so and cut accordingly.
The obtainable share is where founders inflate. Ask what share the current market leader holds after a decade of effort, then ask what makes a three-year-old startup take more. Single-digit percentages are normal and a defensible small number beats an indefensible large one in every investor conversation.
Why a smaller number often works better
A credible $50m SOM you can walk through line by line is more persuasive than a $5bn TAM with no supporting logic. The purpose is not to prove the opportunity is enormous — it is to prove you understand who buys, what they pay, and why.
If the honest number is too small to build a venture-scale business on, that is genuinely useful information, and much cheaper to learn now than after two years of building.
What this does not do
- Only as good as your customer count and price. Both are estimates, and the result inherits their error.
- Assumes one price for everyone. Tiered pricing and enterprise deals need the segments sized separately.
- A market size is not a plan. It bounds the opportunity; it says nothing about whether you can reach it.