TAM, SAM and SOM Worksheet

A top-down estimate takes a total market figure from a report and keeps a percentage of it. It is quick, but it says nothing about who the customers are or why the share is achievable, and every reviewer knows it.

A bottom-up estimate starts from customers you can name: how many there are, what one of them pays per year, which of them you can serve today and how many of those you can win. Each number is an assumption you can source and argue about, which is exactly what makes it credible.

TAM is the total addressable market (all potential customers × annual revenue per customer), SAM the part you can serve today, SOM the part you can realistically win within the horizon you choose.

• Potential customers: public business or population registers, industry associations, the size of communities and marketplaces your customers use, your own lead lists.
• Revenue per customer: your pricing, the public pricing pages of alternatives, and what customers told you they pay today for the problem.
• Serviceable share: cut by what your product and go-to-market really cover today (languages, regions, company size, integrations), not by what you plan for later.
• Obtainable share: tie it to a plan (how many customers your sales and marketing can reach and convert per year) and to your own funnel numbers where you have them.

A believable SOM comes with a customer count and a way to reach those customers. "About 1,680 paying customers in 3 years" invites the right questions: through which channel, at what conversion, with which team. A big number without a count does not.

Low and High multiply all pessimistic or all optimistic values, so they are extremes, not likely outcomes. The truth usually sits between them; the width of the range tells you how much you still need to learn.

• TAM = potential customers × annual revenue per customer.
• SAM = TAM × serviceable share.
• SOM = SAM × obtainable share.
• Customers at SOM = potential customers × serviceable share × obtainable share.
• Each scenario column multiplies its own values. An empty Low or High uses the Base value.
• Sanity notes: obtainable share above 10% within 3 years, fewer than 10 customers at SOM, High SOM more than 20× Low (with the step whose High ÷ Low is largest), Low above High, steps without a source. A top-down figure that differs from the bottom-up SAM by more than 3× gets a note too.
• The picture follows the square root of the values while SOM is at least 1/50 of TAM; below that it uses fixed sizes and says "not to scale". On phones it is always schematic.

I charge monthly. What do I enter as revenue?

The yearly amount: the monthly price × 12, or less if customers usually stay fewer months in their first year. The worksheet always reports money per year.

Does this work for consumer products?

Yes. Count people or households instead of companies, and use what one of them spends with you per year. For free products with ads or upsells, use the average revenue per user per year.

How do I pick the serviceable share?

Start from the whole list of potential customers and remove the ones you can't serve today: other languages, regions you don't sell in, segments your product doesn't fit, channels you can't reach. What is left, as a share of the whole, is the serviceable share.

Why three scenarios instead of one number?

Every step is an estimate. A range shows how uncertain the result is and which assumption matters most. A single number hides both.

Why is the picture not to scale?

A realistic SOM is often less than 2% of TAM. Drawn to scale it would be a dot you can't see, so below 1:50 the rings keep fixed sizes and say so.

Can I put this in a pitch deck?

Yes, with the sources for each assumption. Copy the summary or download the CSV, and show the customer count next to the SOM.

Where are my numbers stored?

Only in this browser, so the worksheet is still here after a reload. Nothing is sent to us or anyone else. Start empty clears it.

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