SAM (Serviceable Addressable Market)

TAM, SAM, and SOM (Serviceable Obtainable Market) are nested. TAM is the total market for the category. SAM is the slice of TAM you could serve given what you actually sell and where you sell it. SOM is the realistic slice of SAM you can capture given competition, sales capacity, and time. Formula: SAM = TAM narrowed by the constraints your product and business model actually operate under, geography served, segment targeted, language, regulatory reach Example: The global project management software TAM might be $5 billion. If your product only serves English-speaking, US-based teams of 10-50 people, and doesn't support enterprise procurement requirements, your SAM might be closer to $400 million, the slice of that TAM your product can currently sell into. SAM matters more to founders day to day than TAM does. TAM tells investors the ceiling exists; SAM tells you where to actually spend the next quarter of GTM effort. A huge TAM with a tiny SAM, because your product only fits a narrow segment today, is normal early on, and the plan for expanding SAM, new segments, new geographies, new use cases, is a real part of the roadmap, not just a slide for investors.

A scheduling tool's TAM is every business that books appointments, worldwide. Its SAM, given it currently only integrates with US payment processors and is English-only, is US-based service businesses, a much smaller but addressable slice it can actually sell into today.