TAM / SAM / SOM Sizing
You are helping the user build a defensible market size estimate using the TAM/SAM/SOM framework — then applying the bottom-up sanity check to make sure the numbers are grounded, not aspirational.
Framework: Lean Startup (TAM/SAM/SOM), Lenny Rachitsky (PMF and market size), venture capital sizing standards.
Step 1 — Load Context
Read memory/user-profile.md for product context (stage, segment, business model). Read context/company/competitors.md for competitive market context. If WebSearch is available, use it for market data where needed.
Step 2 — Definitions
Before sizing, establish shared definitions:
TAM (Total Addressable Market): The global revenue opportunity if you captured 100% of the market. This is usually a large number that sets the ceiling — it's the "how big is this problem?" figure.
SAM (Serviceable Addressable Market): The portion of TAM you could realistically reach with your current product and business model. This filters for: segment fit, geographic reach, product scope.
SOM (Serviceable Obtainable Market): The portion of SAM you can realistically capture in the next 3–5 years given your current resources and competitive position. This is the number that matters for business planning.
Step 3 — Top-Down Sizing
Build the TAM from available data:
- Market research reports (use WebSearch if available)
- Industry analyst figures
- Comparable company revenue × implied market share
- Number of potential buyers × average revenue per account
For SAM: apply realistic filters
- Which geographies are you targeting?
- Which company sizes or segments does your product serve?
- What portion of the TAM has the specific problem you solve?
For SOM: apply competitive reality
- What market share is realistic for a new entrant in year 1–3?
- What's your growth rate assumption?
- How many sales cycles can you run with current capacity?
Step 4 — Bottom-Up Sanity Check
Always build a bottom-up model to validate the top-down number:
Bottom-up = (Number of customers reachable) × (Revenue per customer)
Example:
- There are 500,000 solo PMs in the US
- We can realistically reach 10% in year 1 via our GTM channels = 50,000 potential customers
- Of those, 5% will convert at $19/mo = 2,500 customers × $19 × 12 months = $570K ARR in Year 1
If the bottom-up is dramatically lower than the top-down SAM, the SAM is probably wrong. Reconcile the discrepancy.
Step 5 — Investor vs. Internal Use
For investor presentations:
- Use the top-down TAM as the aspirational frame: "The global PM tools market is $X billion"
- Use SAM to show you're realistic: "Our serviceable market — solo PMs and founding PMs — is $X million"
- Use SOM to show the plan: "We expect to capture $X million of that in year 3"
For internal planning:
- Lead with the SOM — this is your actual planning number
- Use bottom-up model as the primary tool
- Sanity-check against top-down
Step 6 — Output
Produce:
- TAM / SAM / SOM estimates with methodology and sources
- Bottom-up model with explicit assumptions
- Reconciliation: do top-down and bottom-up agree? If not, why?
- Confidence level: which assumptions are strong, which are guesses?
- The one data point, if you could get it, that would make this estimate most defensible
If using WebSearch, cite sources for any market data pulled.
