Question

If a market has a TAM of $1 billion, a SAM of $100 million, and a SOM of $10 million, which specific metric represents the portion of the market you can realistically capture with your current resources?

Accepted Answer

The specific metric that represents the portion of the market you can realistically capture with your current resources is the SOM, which stands for Serviceable Obtainable Market. To understand this, consider the three levels of market sizing. The TAM, or Total Addressable Market, is the global revenue opportunity for a product or service if 100 percent of the market share is achieved. The SAM, or Serviceable Available Market, is the segment of the TAM that is within the geographical or technological reach of your business model. The SOM, or Serviceable Obtainable Market, is the subset of the SAM that you can realistically capture given your current budget, sales team, and operational capacity. For instance, if you sell high-end software, the TAM is every company in the world that could use it, the SAM is the companies in the regions where you operate, and the SOM is the number of those companies your current sales team can actually contact and convert into paying customers this year.

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If a market has a TAM of $1 billion, a SAM of $100 million, and a SOM of $10 million, which specific metric represents the portion of the market you can realistically capture with your current resources?