Key takeaways
- TAM is the ceiling, SAM the reachable part, SOM the realistic near-term share.
- Bottom-up sizing (customers times price) is easier to check than top-down.
- Every figure rests on assumptions. State them where an investor can see them.
TAM SAM SOM with a bottom-up example
A fictional startup sells scheduling software to independent physiotherapy clinics. The figures are illustrative assumptions, not market data.
| Measure | Assumption | Result |
|---|---|---|
| TAM | 40,000 clinics in the countries it could ever sell to, at €3,000 a year | €120 million |
| SAM | 15,000 clinics in its two launch countries that use online booking | €45 million |
| SOM | 1,500 clinics it can win in four years with its sales capacity | €4.5 million |
What investors check on a market slide
Delsivo's deck analyzer, planned for the Pilot release, extracts market figures with the slide they came from, and they are kept as founder reported until checked.
- Whether the customer count and price come from a source or a guess.
- Whether the price matches what current customers actually pay.
- Whether SOM follows from the sales plan, or is a round percentage of SAM.
- Whether TAM quietly includes adjacent markets the product does not serve.
Common confusions
- Top-down sizing takes an industry total and a percentage; it often hides the assumptions that matter.
- SOM is not a revenue forecast. It is a reachable share given the plan.
- A large TAM does not make a company venture scale if SAM is small and hard to grow.