TAM (Total Addressable Market) and SAM (Serviceable Addressable Market) are key market sizing concepts used by startups and investors to estimate business potential.
Understanding TAM vs. SAM along with SOM helps businesses develop go-to-market strategies and assess revenue potential.
Example:
You’re launching a productivity app for freelancers in the U.S.
👉 For a full breakdown of with calculation methods and visuals, visit TAM vs SAM vs SOM: How to Define and Use Market Size for Your Startup.
Why is TAM important for startups?
TAM helps investors and founders estimate market potential, guiding business strategy and investment decisions.
How does SAM differ from TAM?
SAM is a subset of TAM, representing the realistic market share a company can capture based on product, location, and resources.
How do startups calculate TAM and SAM?
Startups use industry research, competitor analysis, and customer segmentation to estimate TAM and narrow it down to SAM.
What is the relationship between TAM, SAM, and SOM?
TAM: Total market demand SAM: Realistic portion of TAM the company can serve SOM (Serviceable Obtainable Market): The market share the company expects to actually capture
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