Total addressable market (TAM) estimates the global potential demand for a product across all possible customers or locations. Startups use it in investor pitches to frame the size of the opportunity, but reported figures are often speculative and unsupported. section 12.1.2
Separate TAM from the narrower market measures commonly used in startup pitches:
- Serviceable available market (SAM) identifies the audience the product could reach. section 12.1.2
- Serviceable obtainable market (SOM) estimates the portion of the addressable market the business is likely to own. section 12.1.2
- TAM describes the broadest opportunity, while SAM and SOM progressively constrain reach and expected ownership. section 12.1.2
