Three nested market sizes. TAM is the total yearly demand for your kind of product, SAM the part you can reach, and SOM the part of SAM you can realistically capture in the short term.

What is the difference between TAM and SAM?

TAM counts every potential customer. SAM keeps only those you can serve today: in the regions you sell to, in the segments your product fits and within reach of your channels.

How do you calculate SOM?

Take the share of SAM you can win in a set number of years, or work from capacity: sales reps × deals per rep a year × years × annual contract value. Both should land close to each other.

What is bottom-up market sizing?

Sizing from the customer up: count the accounts that fit your profile and multiply by what each pays a year. Investors prefer it to top-down because each assumption can be checked.

Is TAM measured in revenue or customers?

In yearly revenue, so TAM, SAM and SOM compare directly with ARR. Keep the account counts next to them: 12,000 serviceable accounts is easier to sanity-check than $43.2 million.

How do I show TAM SAM SOM in a pitch deck?

Use three nested circles with the three values, then one line on how you got each. Export the diagram here as PNG or SVG in light or dark, and paste the statement and assumptions under it.

Free calculator

TAM SAM SOM calculator for market sizing

Size your market bottom-up or top-down, export the TAM SAM SOM diagram for your pitch deck, and copy a market sizing statement and the assumptions behind it.

Updated October 27, 2026

Your market

Target accounts

Companies or people who could ever buy this kind of product.

Annual contract value

What one account pays a year.

Share you can serve

Set any factor that does not apply to 100%.

Regions

Segments

Channels

SOM from

Share of SAM you can win

Years

Runs in your browser. Nothing you type is sent or stored.

TAM: $432M
SAM: $43.2M
SOM: $1.3M

Copy for your deck

We estimate a total addressable market (TAM) of $432M a year: 120,000 target accounts paying $3,600 a year. Our serviceable available market (SAM) is $43.2M, the 10% of those accounts in the regions, segments and channels we can serve. We aim to win a serviceable obtainable market (SOM) of $1.3M a year within 3 years, 3% of SAM.

Sanity checks

No warnings from the checks.

As recurring revenue, a SOM of $1.3M a year is $108,000 of MRR from 360 customers. Open in the ARR calculator

Quick answer

How do you calculate TAM, SAM and SOM?

TAM (total addressable market) is every potential customer × what each pays a year. SAM (serviceable available market) is the part of TAM you can reach with your product, regions and channels. SOM (serviceable obtainable market) is the part of SAM you can realistically win in a few years. 120,000 accounts × $3,600 = $432M TAM; 10% serviceable = $43.2M SAM; 3% of that = $1.3M SOM.

How to use the TAM SAM SOM calculator

Pick a method
Bottom-up when you can count your target accounts, top-down when you start from an industry report. Bottom-up is the one to lead with in a pitch.
Narrow TAM to SAM
Enter the share of accounts in your regions, in the segments your product fits and within reach of your channels.
Set SOM
Use a share of SAM, or your sales capacity: reps × deals per rep a year × years. Read the sanity checks.
Export it
Download the diagram as PNG or SVG in light or dark, and copy the statement and assumptions table into your deck.

How the calculator works

Bottom-up, TAM is the number of potential customers times what each would pay a year. Paul Graham puts it this way: if x customers would pay an average of $y a year, your TAM is $xy. SAM keeps the accounts you can serve: TAM × the share in your regions × the share in segments your product fits × the share your channels reach.

SOM is what you can win within a set number of years. As a share, it is SAM × that share. From sales capacity, it is reps × deals per rep a year × years × annual contract value, capped at SAM. Top-down, TAM is industry spend × your category’s share of it, then SAM and SOM follow as shares.

All three are yearly revenue. A SOM of recurring revenue is the ARR you would reach, so SOM ÷ 12 is the MRR. The checks compare SOM with Pear VC’s observation that tech companies have typically held 0.1% to 2% of their addressable market by their IPO, and flag a SAM equal to TAM, a capacity bigger than SAM and a top-down-only estimate. The diagram is not to scale, so the small circle stays readable.

Formula

TAM = target accounts × annual contract value
SAM = TAM × % in your regions × % in your segments × % your channels reach
SOM = SAM × % you can win
    or sales reps × deals per rep a year × years × annual contract value
Top-down TAM = industry spend × % in your category
MRR implied = SOM ÷ 12

Worked example

120,000 target accounts × $3,600 a year = $432M TAM.
40% in the regions you sell to × 50% in your segments × 50% within reach of your channels = 10%.
SAM: $432M × 10% = $43.2M, or 12,000 accounts.
SOM: 3% of SAM within 3 years = $1.296M a year, or 360 customers.
Cross-check: 3 reps × 40 deals a year × 3 years = 360 customers. As recurring revenue, $1.296M is $108,000 MRR.

TAM vs SAM vs SOM

Term	Stands for	What it measures
TAM	Total addressable market	Yearly revenue if every potential customer bought your kind of product from you.
SAM	Serviceable available market	The part of TAM your product, regions and channels can reach today.
SOM	Serviceable obtainable market	The part of SAM you can realistically win in the next few years.

Bottom-up or top-down

Top-down starts from a total market size and takes a share of it; bottom-up counts the customers who fit your profile and multiplies by what they would pay. Lead with bottom-up. a16z says it likes seeing a bottoms-up analysis, and Pear VC says investors prefer it because its assumptions can be tested and validated. A top-down figure is still a useful cross-check: if the two disagree by an order of magnitude, one of your assumptions is wrong.

Common market sizing mistakes

Counting everyone who might ever buy software as TAM. Presenting only a top-down number. Claiming a SOM with no sales capacity or channel behind it. Mixing one-time and yearly revenue. Pear VC notes that pitch decks often state a 10% potential market share, while tech companies have typically held 0.1% to 2% of their addressable market by their IPO.

TAM SAM SOM questions

What is TAM SAM SOM?: Three nested market sizes. TAM is the total yearly demand for your kind of product, SAM the part you can reach, and SOM the part of SAM you can realistically capture in the short term.
How do you calculate TAM?: Multiply the number of potential customers by what each would pay a year. 120,000 target companies paying $3,600 a year is a TAM of $432 million. Top-down, multiply total industry spend by your category’s share.
What is the difference between TAM and SAM?: TAM counts every potential customer. SAM keeps only those you can serve today: in the regions you sell to, in the segments your product fits and within reach of your channels.
How do you calculate SOM?: Take the share of SAM you can win in a set number of years, or work from capacity: sales reps × deals per rep a year × years × annual contract value. Both should land close to each other.
What is a realistic SOM?: One your sales capacity can deliver. Pear VC notes that tech companies have typically held 0.1% to 2% of their addressable market by the time they go public, so a young company claiming more needs a strong reason.
What is bottom-up market sizing?: Sizing from the customer up: count the accounts that fit your profile and multiply by what each pays a year. Investors prefer it to top-down because each assumption can be checked.
Is TAM measured in revenue or customers?: In yearly revenue, so TAM, SAM and SOM compare directly with ARR. Keep the account counts next to them: 12,000 serviceable accounts is easier to sanity-check than $43.2 million.
How do I show TAM SAM SOM in a pitch deck?: Use three nested circles with the three values, then one line on how you got each. Export the diagram here as PNG or SVG in light or dark, and paste the statement and assumptions under it.

Cite this tool

Free to link and quote. Use this reference:

SaaSCity, "TAM SAM SOM Calculator", October 27, 2026. https://saascity.io/free-tools/tam-sam-som-calculator