TAM / SAM / SOM

Definitions

1. Total Addressable Market / Serviceable Addressable Market / Serviceable Obtainable Market — three concentric circles of market opportunity used in pitch decks. TAM is the total demand, SAM is your segment, SOM is what you can realistically capture. VCs divide your TAM by 10 and your SOM by another 10.

   In plain English: Three ways to measure how big a market opportunity is — the whole pie (TAM), the slice you could serve (SAM), and the slice you can realistically get (SOM).

Etymology

1990s

Business plan templates formalize TAM (Total Addressable Market), SAM (Serviceable Available Market), and SOM (Serviceable Obtainable Market)

2005

VCs standardize the TAM/SAM/SOM framework as a required section of pitch decks, filtering for market size

2010s

The framework becomes both essential and satirized — every startup claims a billion-dollar TAM by defining the market broadly enough

Related Terms

• Product-Market Fit
• Growth Hacking