TAM / SAM / SOM, Bottom-Up Market Sizing

Sizes a market bottom-up into TAM, SAM, and SOM dollar figures from unit counts and contract value rather than top-down percentages. Inputs are total units in the market, serviceable units, reachable units near-term, expected penetration, and annual contract value.

Interactive Tool

Total units in market (TAM)

Serviceable units (SAM)

Reachable units near-term

Near-term penetration

Annual contract value (ACV)

TAM · total ceiling

$2.70B

SAM · what the model can serve

$432.0M

SOM · realistic near-term

$2.4M

675 units × $3,600 ACV

TAM ÷ SOM gap

~1,111×

a factor-of-1,000 gap is normal and honest

Credible sizing is bottom-up: filter the market to firms that would pay, in reachable geographies, at the real price. A founder who pitches the broadest TAM as the opportunity loses credibility; the SOM with a clear expansion path is the story investors underwrite.

Learn the concept

This calculator comes from the free Entrepreneurial Finance course, where the concept is taught with readings, worked examples, and practice questions.

Open Entrepreneurial Finance

Built by Devon Coombs, CPA, MBA, Teaching Professor of Finance at Santa Clara University.