What is total addressable market?

Total addressable market (TAM) is the total revenue opportunity available if a product achieved 100% of its potential market. It is usually estimated top-down (industry reports), bottom-up (number of potential buyers × average price), or by value theory. TAM sits above SAM (the serviceable slice you target) and SOM (what you can realistically capture).

TAM matters for prioritization and fundraising, but the bottom-up version is the honest one: counting the actual companies who could buy at your actual price grounds strategy in reality rather than in headline-friendly billions.