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TAM SAM SOM Calculator

Size your market bottom-up: total addressable, serviceable available and serviceable obtainable. Get a one-paragraph market sentence for your application and deck.

TAM

$1.20B

Total addressable market

SAM

$240.0M

Serviceable available

SOM

$7.2M

3,000 customers

Your market paragraph

There are 500,000 mid-market SaaS finance teams worldwide. At $2,400 per year that's a $1.20B market. We can serve 20% of it today ($240.0M), and we expect to win 3% of that within three years — 3,000 customers and $7.2M in revenue.

Worked example: scheduling software for dental clinics

An illustrative startup sells appointment software to dental clinics for $250 a month ($3,000 a year). The numbers below are round, example inputs to show the method; replace them with figures you can source.

LayerWho countsMathResult
TAMAll dental clinics worldwide (example: 150,000)150,000 × $3,000$450M / year
SAMClinics in the markets the product supports today (40%)60,000 × $3,000$180M / year
SOMShare realistically won in 3 years (3% of SAM)1,800 × $3,000$5.4M / year

The SOM of 1,800 clinics is the number to defend: it means signing about 50 clinics a month for three years. If your sales channel can do that, the plan is believable. The TAM shows the ceiling; the path to growing it is adding products clinics also pay for, such as billing or reminders.

Top-down vs bottom-up: a top-down version would say "dental software is a multi-billion dollar industry, we'll take 1%." It sounds bigger but can't be checked. The bottom-up version above uses a customer count and a price you actually charge, which is what investors ask for.

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How to use this tool

  1. Step 1

    Describe the customer

    Be specific — 'mid-market SaaS finance teams', not 'businesses'.

  2. Step 2

    Count them and price them

    Use a defensible customer count and the annual price you can actually charge.

  3. Step 3

    Narrow twice

    SAM is who you can serve now; SOM is who you can win in three years.

  4. Step 4

    Copy the sentence

    Paste the generated paragraph into your application or deck.

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FAQ

How do you calculate TAM, SAM and SOM?

TAM = total customers in the market × annual revenue per customer. SAM = the slice you can actually serve (geography, segment, regulation). SOM = the share of SAM you can realistically win in three years given your channels and capacity.

What is the difference between TAM, SAM and SOM?

TAM is the whole market, SAM is the part your product can serve today, and SOM is the part you can win near term. TAM sets ambition, SOM sets your plan.

Should I use top-down or bottom-up market sizing?

Bottom-up. Investors discount analyst reports quickly. Counting real customers × real price you can charge is far more credible and it is what YC partners push founders toward in interviews.

How big does TAM need to be for YC?

There is no threshold, but the standard question is whether the company could plausibly become very large. A credible path to $1B+ in annual revenue is the usual bar investors are testing for.

What is a good SOM percentage?

Most credible early-stage plans assume winning 1–5% of SAM within three years. Claiming 20%+ of a large market without a distribution advantage is a red flag for investors.

Is TAM revenue or number of customers?

TAM is usually stated as annual revenue: number of potential customers multiplied by what each pays per year. Showing the customer count alongside makes it easier to check.

What is the most common TAM mistake?

Quoting a huge industry figure ('healthcare is $4 trillion') instead of the spend on the specific problem you solve. Investors want the market for your product, not the industry it sits in.

How do I show market size in a pitch deck?

One slide: the three numbers, the bottom-up formula behind them (customers × price), and one sentence on why the market grows. Keep sources for every input ready for questions.

Is this TAM SAM SOM calculator free?

Yes. No signup and nothing is stored.

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