How to Size Your Addressable Market (TAM, SAM, SOM, top-down vs. bottom-up)

Raising capital for your startup requires you to fully understand the size of your market. This video simplifies this process as you start building (and fundraising). Let’s go!

FREE TEMPLATES:

-Total Address Market Spreadsheet:
https://docs.google.com/spreadsheets/d/1XipJoOHwaultE4R_QFYzu5-UPHpX4HmkUf3SCZgw9rE/edit?usp=sharing

-Google Slide (Market Sizing) for Investor Deck:
https://docs.google.com/presentation/d/1kYWZ_devqtaFumKfzX4l8qndG1lTHQ48FdBZbCnycoQ/edit?usp=sharing

TIMESTAMPS
0:00 Intro
0:59 What is TAM?
1:19 What is SAM?
1:32 What is SOM?
1:42 Top-down vs bottom-up
2:43 Intro to template
3:23 TAM, SAM, SOM deep-dive
6:29 Investor deck template for the market size
7:52 Conclusion

DEFINITIONS:

TAM = Total Addressable Market is the total market for your product. So if everyone in the world could buy your product, equaling 100% of the market, regardless of the competition in the market.

SAM = Serviceable Available Market is the portion of the market that you can acquire based on a current business model you are adopting.

SOM = Serviceable Obtainable Market is the subset of your SAM that you will realistically get to use your product. This is effectively your target market that you will initially try to sell to.

IMPORTANT TAKEAWAY
Use a bottom-up approach when leveraging TAM, SAM, and SOM.