SOM (Serviceable Obtainable Market) is the realistic portion of the Serviceable Addressable Market (SAM) that a company can capture, based on its resources, competition, and market reach. It represents the actual market share a business expects to obtain within a specific timeframe, considering real-world constraints like budget, distribution channels, and operational capacity.
SOM is often used in startup funding and market analysis to set realistic revenue goals and investor expectations.
Why is SOM important for startups?
SOM helps startups and investors understand real revenue potential, ensuring growth projections are practical and achievable.
How do startups calculate SOM?
-Competitor market share -Customer acquisition capabilities -Sales and marketing budgets -Distribution reach and business scalability
How do investors use SOM in decision-making?
Investors focus on SOM to gauge realistic market traction and revenue potential, helping them determine the viability of a startup’s business model.
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