Market Sizing Calculator (TAM/SAM/SOM)
Free TAM SAM SOM calculator for startups. Estimate your Total Addressable Market, Serviceable Addressable Market, and Serviceable Obtainable Market using top-down or bottom-up approaches. Visual funnel chart for your pitch deck. No sign-up required.
Build your estimate from unit economics — more credible with investors.
Total businesses or users in your target market
Early-stage SaaS typically converts 2-5% of reachable leads
How to Calculate Your Market Size
1. Choose Your Approach
Select Top-Down if you have an industry report with a known market size and want to filter it down to your segment. Select Bottom-Up if you want to build your estimate from unit economics — number of potential customers multiplied by your price. Both approaches are valid; using both strengthens your pitch.
2. Enter Your Inputs
For Top-Down: enter the total market value and use the sliders to set what percentage is addressable (SAM) and what percentage you can capture (SOM). For Bottom-Up: enter the number of potential customers, your average annual revenue per customer, and three percentage filters — what portion needs your product, what portion you can reach, and what portion you can convert.
3. Review the Funnel
See your TAM, SAM, and SOM visualized as a funnel chart. The funnel shows how the market narrows at each stage. Use this visual directly in your pitch deck. Adjust the sliders to model different scenarios — what if you expand to a new geography, or increase your price?
4. Validate Your Assumptions
Compare your bottom-up estimate against industry reports (top-down). If they are within 2x of each other, your assumptions are likely sound. A large gap means you should revisit your customer count, pricing, or addressable percentage. Investors will challenge these numbers — be ready to defend each input.
Key Market Sizing Terms
- Total Addressable Market (TAM)
- The total revenue opportunity available if a product achieved 100% market share. TAM represents the maximum demand for your product or service. For example, the global CRM market TAM is approximately $80B. TAM sets the ceiling for your opportunity.
- Serviceable Addressable Market (SAM)
- The segment of TAM that your product can actually serve, given your business model, geography, pricing, and capabilities. If your CRM only serves SMBs in Europe, your SAM is a fraction of the $80B TAM. SAM is what investors focus on as the realistic opportunity.
- Serviceable Obtainable Market (SOM)
- The portion of SAM you can realistically capture in the next 1-3 years given your current resources, team size, and go-to-market strategy. SOM is your near-term revenue target. For early-stage startups, SOM is typically 1-5% of SAM.
- Top-Down Sizing
- A market sizing approach that starts with a large, known market figure (from analyst reports or public data) and narrows it using filters like geography, segment, and customer type. Quick but can be imprecise — relies on the accuracy of the source data.
- Bottom-Up Sizing
- A market sizing approach that builds from unit-level data: number of potential customers multiplied by average revenue per customer. More granular and credible than top-down, because it is directly tied to your business model and pricing.
Tips for Credible Market Sizing
- 1.Always present both top-down and bottom-up estimates. If they converge, it validates your assumptions. If they diverge, investigate before pitching.
- 2.Investors care more about SAM than TAM. A $100M SAM you can clearly explain beats a hand-wavy $10B TAM. Be specific about your customer segment.
- 3.Use credible data sources: Statista, Gartner, government census data, industry associations. Cite your sources — investors will check.
- 4.Be honest about SOM. Claiming 10%+ market share in year one with a 3-person team destroys credibility. Show the math: X customers × $Y price × Z% conversion.
- 5.Update your market sizing quarterly. Markets shift — new competitors, regulation changes, and pricing trends all affect your TAM/SAM/SOM.
- 6.Think about market expansion. Your initial SOM might be small, but show how you plan to expand SAM over time — new geographies, adjacent segments, higher price tiers.
Frequently Asked Questions
TAM (Total Addressable Market) is the total revenue opportunity if you captured 100% of your market. SAM (Serviceable Addressable Market) is the portion of TAM you can realistically reach with your product and go-to-market. SOM (Serviceable Obtainable Market) is the share of SAM you can realistically capture in the near term — typically 1-5% for early-stage startups.
Top-down starts from a known total market size (from industry reports) and filters down by percentages. Bottom-up starts from your unit economics — number of customers, price per customer — and multiplies up. Bottom-up is generally more credible with investors because it is grounded in your actual business model.
Most investors prefer bottom-up because it shows you understand your customer and pricing. However, presenting both approaches side-by-side is strongest — it validates your bottom-up estimate against industry data. If the two approaches are wildly different, it signals a problem in your assumptions.
For early-stage startups, a SOM of 1-5% of SAM is considered realistic. Claiming more than 10% market share within 3 years raises red flags with investors unless you have a strong moat or network effect. The key is showing a credible path to your SOM, not just a number.
For top-down: use industry reports from Statista, Gartner, IBISWorld, or Grand View Research. For bottom-up: count potential customers in your target segment (census data, LinkedIn, industry directories) and multiply by your annual price. Government data (BLS, Eurostat) is free and credible.
Use a funnel visual showing TAM → SAM → SOM with clear dollar amounts. State your assumptions (customer count, price, addressable %). Show both top-down and bottom-up if they converge. Investors want to see a $1B+ TAM to justify venture-scale returns, but a credible $100M SAM is more important than an inflated TAM.
No. All calculations happen entirely in your browser. No data is sent to any server, stored, or shared. Your market sizing stays completely private.
