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Calculates TAM, SAM, and SOM market sizes using VC-standard methodology. Useful for pitch decks, business plans, or investment theses.
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Produce a credible, bottoms-up market size estimate that quantifies the addressable opportunity across Total, Serviceable, and Obtainable segments.
Produce a credible, bottoms-up market size estimate that quantifies the addressable opportunity across Total, Serviceable, and Obtainable segments.
Adopted by: Sequoia Capital, Andreessen Horowitz, Gartner, IDC, and every venture-backed startup pitch process Impact: Sequoia's pitch framework explicitly requires TAM/SAM/SOM. a16z partners have stated market size is the #1 factor in investment decisions — a compelling, defensible TAM is required to attract top-tier venture capital. Gartner's market sizing methodology is used by 85% of Fortune 500 strategy functions for capital allocation. Why best: TAM/SAM/SOM provides a structured hierarchy that distinguishes theoretical opportunity from realistic near-term addressability, forcing intellectual honesty about go-to-market constraints.
Sources: Sequoia Capital pitch framework; a16z "What We Look for in a Business" (2020); Gartner Market Sizing Methodology; Moore "Crossing the Chasm" (2014) Chapter 5
Define the unit of analysis — decide what "one customer" means: a person, a household, a company, a transaction, or a subscription. Consistency of unit is required across all three calculations.
Choose your sizing methodology — use bottoms-up as primary (count target customers × willingness to pay × frequency). Use top-down (analyst report × applicable %) to cross-check. Never rely on top-down alone — investors dismiss "we capture 1% of a $50B market."
Calculate TAM (Total Addressable Market) — the revenue opportunity if 100% of the target market adopted your product at your price. Include all geographies and all sub-segments the product could theoretically serve.
TAM = Total potential customers × Annual revenue per customer
Find your customer count — use: census data, industry association reports (AAAA, NAR, AMA), SEC filings of public competitors, LinkedIn company data, or government datasets (US Census, BLS, Eurostat). Cite the source.
Establish willingness to pay — anchor on: (a) what customers pay for the incumbent solution today, (b) percentage of the cost/problem you solve, or (c) validated pricing from customer discovery interviews. Never use a price you haven't tested.
Calculate SAM (Serviceable Addressable Market) — the subset of TAM your product can actually serve given: geographic constraints, go-to-market model limitations, language/regulatory barriers, and channel reach.
SAM = TAM × (% of market your model can reach)
Layer in segmentation filters — apply ICP filters to TAM to get SAM: company size range, industry verticals, tech stack compatibility, decision-maker title. Each filter reduces the number.
Calculate SOM (Serviceable Obtainable Market) — realistic revenue you can capture in 3–5 years given: competitive share, sales capacity, CAC constraints, and organic growth rate. SOM must be defensible from a bottoms-up model.
SOM = SAM × Realistic market share % (typically 1–10% for early-stage)
Validate SOM with unit economics — build a sanity check: if SOM = $50M ARR, and your ACV = $10K, you need 5,000 customers. At your current CAC and sales capacity, can you acquire 5,000 customers in 5 years? If not, SOM is too high.
Present with growth rate context — investors care about market trajectory as much as size. Add: CAGR of the market (cite source), tailwinds (regulations, demographic shifts, technology) and headwinds (market maturity, competitive saturation). A $1B market growing at 25% is more attractive than a $10B market declining at 5%.
npx claudepluginhub jeffreytse/grimoire --plugin grimoireEstimates TAM, SAM, SOM market sizes using top-down and bottom-up methods, growth forecasts, and key assumptions. Use for quantifying opportunities, investor pitches, market entry evaluation.
Calculates TAM/SAM/SOM using top-down, bottom-up, and value theory methodologies for market sizing, revenue estimation, and startup validation.
Estimate total addressable market (TAM), serviceable market (SAM), and obtainable market (SOM).