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How to size the market for a niche SaaS without inventing numbers

Size a niche SaaS market bottom-up: count the buyers you can name and reach, multiply by the annual price you will actually charge, then take the share you could realistically win in three years. Top-down sizing from an industry report produces impressive, useless numbers. The question a bootstrapped founder needs answered is smaller and sharper — can 200 to 2,000 reachable buyers at your price produce enough revenue to be worth the years, and can you name where those buyers are?

2 hours $0 to run6 stepsUpdated 2026

The workflow

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  1. Not "small businesses" — "UK dental practices with two or more chairs", "Shopify stores doing over $1M with a subscription app installed", "3PLs running 20–100 trucks". A countable buyer is one you could, in principle, enumerate from a directory, an app store listing or a public register. If you cannot describe a way to count them, you cannot size the market and you probably cannot reach them either.

  2. Public registers, app-store install counts, directory listings, LinkedIn filters, trade association membership numbers. Write the source next to the number, because you will revisit this in three months and will not remember whether 12,000 was researched or invented. Two or three independent sources landing in the same order of magnitude is enough precision for this decision.

  3. Use your real intended price, not an aspirational enterprise number. 12,000 practices × $79/month × 12 = $11.4M of annual TAM. This is a much smaller number than an industry report would give you, and it is the only one that relates to your business. A niche where TAM is under about $5M is usually too small to support a full-time bootstrapped income after realistic penetration.

    Market Size CalculatorFull tool
    Input
    12,000 UK dental practices with 2+ chairs, $79/mo, realistically serve English-speaking UK only, 3-year target 2% share
    What comes back
    TAM $11.4M/yr. SAM (UK, self-serve reachable) ≈ $7.6M. SOM at 2% in 3 years ≈ $228k ARR, about 240 customers. That is a strong one-person business and a poor venture-scale one — the number tells you which game you are playing.

    Run it yourself — free, no signup:

    From a source you can point at — government statistics, a platform's published count, a competitor's filing. Write the source down.

    $600
    30%
    3%
    TAM — everyone with the problem
    $204.0M
    A ceiling check. Not a plan.
    SAM — reachable & serviceable
    $61.2M
    102,000 potential customers
    SOM — obtainable in 3 years
    $1.8M
    3,060 customers. This is the only one connected to reality.
    Put this on the slide

    340,000 potential customers, 30% reachable in our segment, $600/year, 3% obtainable in three years = $1.8M.

    The assumptions are the defensible part. The number on its own invites one question you can't answer.

  4. SAM is the slice you can serve and sell to: your language, your geography, the segment your product actually fits, the ones reachable through channels you have. This is where most sizing gets honest — an $11M TAM with no way to reach 80% of it is a $2M business. Write the channel next to the segment, or the segment does not count.

  5. One to five per cent of a reachable niche in three years is a defensible bootstrapped assumption. Convert it to a customer count and ask whether you could name that many buyers — 240 dental practices is a list you could plausibly build; 24,000 is not a bootstrapped plan. The customer count, not the dollar figure, is what makes the number real.

  6. A $228k ARR ceiling at realistic share is an excellent solo business and a bad venture case. Neither answer is wrong — but knowing which one you have before you start determines whether you should hire, raise, or deliberately stay small. The most expensive mistake here is running a $200k-ceiling niche with a $10M-ambition cost structure.

    Runway CalculatorFull tool
    Input
    Target 240 customers at $79/mo in 3 years, current costs $900/mo, founder needs $4,000/mo
    What comes back
    Break-even on founder pay at 63 customers (~26% of the 3-year target). At a realistic 8 net new per month that is month 8 — comfortably inside a 12-month runway. The niche supports one founder well and a second salary only near the ceiling.

    Run it yourself — free, no signup:

    8%
    Runway
    5+ years
    Cash never reaches zero inside five years: you break even at month 12 and it climbs from there. That holds exactly as long as the growth rate does.
    Break-even month
    Month 12
    The month the borrowing stops. Worth more attention than the runway number.
    What cash ÷ burn would tell you
    12 months
    It says 12 months, because it assumes your MRR never moves. That assumption is the entire difference between running out next year and not running out.

    Under six months: cut, because you need a certain effect fast. Above twelve: grow, because growth compounds and cutting caps your ceiling. The founders who get this wrong grow when they should cut — growing feels like progress.

Questions founders ask about this

What's the difference between TAM, SAM and SOM?
TAM is every possible buyer at your price, SAM is the portion you can actually serve and reach, and SOM is the share you could realistically win in a few years. For a bootstrapped founder SOM is the only one that affects decisions.
How do I calculate TAM without market research reports?
Bottom-up: count buyers from public registers, directories or app-store listings, then multiply by your real annual price. Note the source beside each number so you can re-check it later.
How small is too small for a niche SaaS?
As a rough line, a TAM under about $5M usually cannot support a full-time bootstrapped income once you apply a realistic 1–5% share. That does not make it worthless — it makes it a side business rather than a full-time one.
What market share should I assume for a new SaaS?
One to five per cent of a reachable niche over three years is defensible for a bootstrapped product. Convert it to a customer count and check whether you could plausibly name and reach that many buyers.
Does market size matter if I only want a small business?
Yes, because it sets your ceiling. Knowing the niche tops out around $200k ARR is useful information — it tells you not to hire a team or raise money against a number the market cannot produce.

Next, founders usually do this

The tools used above have their own pages — TAM / SAM / SOM Calculator and MRR & Runway Calculator — and the SOP SOP: Size a market without a research budget runs the same ground in more depth. Also worth reading: the Nine Lives Doctrine, and real verdicts from ideas kitty has run this workflow on.

kitty.build runs this entire workflow for you

Every step above — the research, the competitor read, the numbers, the honest verdict — is what nine specialist AI boards do automatically when you feed her an idea. She will tell you to kill it if it deserves killing. First idea is free.

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