How do you calculate TAM, SAM, and SOM?

Start with TAM — the total revenue available if every possible buyer bought, estimated top-down from industry reports or bottom-up as number of potential buyers × what each pays per year. SAM is the slice of TAM your product can actually serve, filtered by geography, segment, platform, and language — typically expressed as a percentage of TAM. SOM is the share of SAM you can realistically win in the next few years given your team, funding, and the competitors already serving those buyers — a percentage of SAM. Example: a $2.5B TAM where you can serve 20% gives a $500M SAM; winning 5% of that is a $25M SOM.

What is the difference between TAM, SAM, and SOM?

They are three nested cuts of the same market. TAM (total addressable market) is everyone who could ever buy the category. SAM (serviceable available market) removes the buyers you can't reach or serve — wrong geography, wrong segment, wrong platform. SOM (serviceable obtainable market) removes the buyers you won't win — the ones competitors keep, plus the limits of your own sales and marketing capacity. Investors read TAM as the ceiling, SAM as your actual playing field, and SOM as your realistic near-term revenue target.

What is a realistic SOM percentage?

For most startups, 1–5% of SAM within 2–3 years is defensible; 10%+ needs a story — a structural advantage, a distribution lock-in, or a market with no real incumbent. The test is bottom-up: divide your SOM by your average contract value and check that your team can actually close that many customers. A SOM your sales capacity can't deliver is a TAM slide, not a plan.

Should I size my market top-down or bottom-up?

Do both — they check each other. Top-down starts from an analyst's market figure and applies your serve and win percentages; it's fast but inherits whatever the report got wrong. Bottom-up multiplies real potential buyers by a real annual price, which forces you to define who counts as a buyer and what they'd pay — that's why investors trust it more. If the two methods land an order of magnitude apart, your buyer definition is the problem.

Is this TAM SAM SOM calculator free? Do I need an account?

Yes, and no account. The calculator runs entirely in your browser and nothing you type is sent to our servers. We only ask for an email if you want to download the result as a PDF.

Free tool

TAM SAM SOM Calculator

Size your market as a funnel: enter your total addressable market — or build it bottom-up from buyers × price — then set the share you can serve and the share you can win. TAM, SAM, and SOM update live, with a funnel visual you can drop straight into a deck. Free, runs in your browser, no account.

Top-down: market size → your funnel

Start from an analyst or industry-report figure for the whole category.

Total addressable market (TAM), per year

% of TAM you can serve (→ SAM)

% of SAM you can win (→ SOM)

Serviceable available market (SAM): —
Serviceable obtainable market (SOM): —
SOM as a share of TAM: —

Your market-size funnel

TAM

—

SAM

—

SOM

—

Bottom-up: buyers × price → your funnel

Build the TAM from real buyers and a real annual price — the version investors trust.

Potential buyers in the market

Revenue per buyer, per year

% of TAM you can serve (→ SAM)

% of SAM you can win (→ SOM)

Total addressable market (TAM): —
Serviceable available market (SAM): —
Serviceable obtainable market (SOM): —
SOM as a share of TAM: —

Your market-size funnel

TAM

—

SAM

—

SOM

—

If this funnel and the top-down one land an order of magnitude apart, your definition of "buyer" is the thing to fix.

Numbers update as you type. Nothing is saved on our servers.

You just sized the market — competitors are taking their share of it right now.

Your SOM is whatever the incumbents don't keep. Outmano watches your competitors' pricing, features, and positioning every day — so you know exactly whose share you're winning, and when they move to take it back.

Track your competitors »

TAM, SAM, and SOM in plain English

SAM = TAM × % you can serve · SOM = SAM × % you can win

TAM — total addressable market. The total revenue available if every possible buyer of the category bought. It's the ceiling, not a target: nobody serves 100% of a market. See the full TAM definition.
SAM — serviceable available market. The slice of TAM your product can actually serve today — filtered by geography, segment, platform, language, and regulation. This is your real playing field. See the SAM definition.
SOM — serviceable obtainable market. The share of SAM you can realistically capture in the next 2–3 years, given your sales capacity, funding, and the competitors already serving those buyers. This is the number that should drive your plan. See the SOM definition.

The gap between SAM and SOM is mostly other people's customers. That's why serious market sizing always names the incumbents: a sizing that ignores the competitors already serving the market overstates the opportunity by exactly their market share.

A worked example: $2.5B → $500M → $25M

Level	Stands for	Who's in it	Size
TAM	Total addressable market	Every company worldwide that could ever buy project-management software	$2.5B
SAM	Serviceable available market	The 20% you can actually serve: English-speaking SMBs on the two platforms you support	$500M
SOM	Serviceable obtainable market	The 5% of SAM you can realistically win in 2–3 years given your team, funding, and the incumbents	$25M

Each level is a percentage of the one above: 20% of the $2.5B TAM is a $500M SAM; winning 5% of that SAM is a $25M SOM — 1% of the original TAM, which is what a credible early-stage plan usually looks like.

How to calculate TAM, SAM, and SOM

Define who counts as a buyer. Not "every business" — the specific companies with the problem your product solves, at a price they'd pay. Everything downstream inherits this definition.
Size the TAM both ways. Top-down: take an analyst's category figure. Bottom-up: multiply your buyer count by a realistic annual price. If the two disagree wildly, tighten the buyer definition until they converge.
Cut TAM down to SAM honestly. Remove buyers you can't reach or serve today: wrong geography, wrong language, wrong platform, deal sizes your model can't support. SAM should describe this year's product, not the five-year roadmap.
Set SOM from capacity and competition, not ambition. How many deals can your team actually close per year, and which buyers are locked up by incumbents? 1–5% of SAM in 2–3 years is the credible range for most startups.
Sanity-check SOM against your sales math. SOM ÷ average contract value = customers you need. If that number doesn't survive contact with your pipeline, the funnel is decoration.
Re-size when the market moves. A competitor launching a cheaper tier, entering your geography, or getting acquired changes your obtainable share overnight. Market size is a snapshot, not a constant.

Working the rest of the go-to-market math? The Share of Voice Calculator measures the visibility share you're actually winning, the Price Elasticity Calculator tests the price you plugged into your bottom-up TAM, and the Competitor Finder names the incumbents standing between your SAM and your SOM. There's more in the free tools catalog.

TAM SAM SOM calculator FAQ

How do you calculate TAM, SAM, and SOM?: Start with TAM — the total revenue available if every possible buyer bought, estimated top-down from industry reports or bottom-up as number of potential buyers × what each pays per year. SAM is the slice of TAM your product can actually serve, filtered by geography, segment, platform, and language — typically expressed as a percentage of TAM. SOM is the share of SAM you can realistically win in the next few years given your team, funding, and the competitors already serving those buyers — a percentage of SAM. Example: a $2.5B TAM where you can serve 20% gives a $500M SAM; winning 5% of that is a $25M SOM.
What is the difference between TAM, SAM, and SOM?: They are three nested cuts of the same market. TAM (total addressable market) is everyone who could ever buy the category. SAM (serviceable available market) removes the buyers you can't reach or serve — wrong geography, wrong segment, wrong platform. SOM (serviceable obtainable market) removes the buyers you won't win — the ones competitors keep, plus the limits of your own sales and marketing capacity. Investors read TAM as the ceiling, SAM as your actual playing field, and SOM as your realistic near-term revenue target.
What is a realistic SOM percentage?: For most startups, 1–5% of SAM within 2–3 years is defensible; 10%+ needs a story — a structural advantage, a distribution lock-in, or a market with no real incumbent. The test is bottom-up: divide your SOM by your average contract value and check that your team can actually close that many customers. A SOM your sales capacity can't deliver is a TAM slide, not a plan.
Should I size my market top-down or bottom-up?: Do both — they check each other. Top-down starts from an analyst's market figure and applies your serve and win percentages; it's fast but inherits whatever the report got wrong. Bottom-up multiplies real potential buyers by a real annual price, which forces you to define who counts as a buyer and what they'd pay — that's why investors trust it more. If the two methods land an order of magnitude apart, your buyer definition is the problem.
Is this TAM SAM SOM calculator free? Do I need an account?: Yes, and no account. The calculator runs entirely in your browser and nothing you type is sent to our servers. We only ask for an email if you want to download the result as a PDF.