TAM, SAM and SOM calculator (2026)

TAM — Total Addressable Market. Everyone on earth with the problem, times annual revenue per customer if they all bought from you. Fictional by construction. Its only job is to show whether the ceiling is high enough to be interesting.

SAM — Serviceable Addressable Market. TAM narrowed to who you can actually sell to: your geography, your language, your segment, your channel. If you're selling in English to UK small businesses, your SAM is not the global market.

SOM — Serviceable Obtainable Market. What you can win in three years given your actual money, headcount and distribution. This is the only one connected to reality, and the one nearly every founder inflates.

"The market is $10 billion. If we get just 1%, that's $100 million."

Every experienced investor has heard this sentence hundreds of times, and it does the opposite of what the founder intends. It reveals that no bottom-up thinking has happened. Market share is an output — of how many customers you can reach, how many convert, and how many stay — never an input you get to pick.

The credible version runs the other way. How many customers can your channel realistically reach next year? What fraction convert? What do they pay? Multiply. That's your first-year number. Grow it by a defensible rate. That's your three-year SOM. If it comes out embarrassingly small, that is genuine information about the business, not a reason to reach for a percentage instead.

Search "how many X are there in Y" and you'll get a number from a press release quoting a report nobody has read. Better sources, in rough order of trustworthiness:

Government statistics. Business counts by industry and size band, published free, in most countries. Usually the best number you'll find for B2B.

Platform directories with real counts. App store category counts, Shopify's published merchant numbers, LinkedIn's filtered result count for a job title in a country. Imperfect, but observable rather than asserted.

Competitor disclosures. A public competitor's customer count and revenue gives you both market size and average price. Their S-1 or annual report is free and unusually honest.

Triangulate two independent methods. If a top-down estimate and a bottom-up count land within 2–3× of each other, you have something defensible. If they're 50× apart, one of them is wrong and finding out which is the actual work.

Show the assumptions on the same slide as the number. "3.4 million UK SMEs (ONS 2024), 12% have the problem based on our 40 interviews, £600/year, 3% obtainable in three years" is a defensible claim. "$2.4bn TAM" is not.

The second version invites the question "where did that come from?" and you have nothing. The first version answers it before it's asked, and the discussion moves to the assumption you're least sure about — which is exactly the conversation you want to have.

Give a range rather than a point. "Between £900k and £2.1m depending on the switching rate" reads as more credible than a single figure, because it shows you know which factor is uncertain. And name the weakest link yourself before anyone else finds it: saying "the switching rate is our softest number and here's how we'd test it" builds more confidence than any figure you could present.

If the honest number comes out small, say it and explain why it's still worth doing. A £900k addressable market is an excellent business for one person. Inflating it to sound venture-scale converts a good small business into a bad big one on paper, and experienced readers spot the inflation instantly — which then makes them doubt every other number on the page.