Market Sizing for Startups: TAM, SAM, SOM

Maximize your startup's market potential with Appolica. This template is designed to guide founders through the process of evaluating the Total addressable market (TAM), Serviceable available Market (SAM), Serviceable obtainable Market (SOM), and employing a bottom-up approach for precise market analysis. Gain critical insights into your market's size and your startup's growth potential, enabling strategic planning and investor engagement.

How to use this template?

1. Gather initial data.

   • Begin with the template to compile data from industry reports, market research, and competitor analysis.

   • Utilize dedicated sections for organizing and categorizing data, laying a solid foundation for your market size estimation.

2. Calculate your Total addressable market (TAM).

   • Determine the TAM to understand the overall revenue opportunity available if 100% market share were achieved.

   • Use the template to guide your calculations, considering the broadest potential customer base.

3. Determine your Serviceable available market (SAM).

   • Narrow down to SAM, focusing on the portion of TAM targeted by your products or services within geographical reach.

   • The template provides a structured approach to segmenting your market based on your operational capacity.

4. Estimate your Serviceable obtainable market (SOM).

   • Estimate the SOM, which is the portion of SAM realistically achievable in the short to medium term, considering competition.

   • Apply the template’s analytical tools to forecast your market share and penetration strategy.

5. Employ a bottom-up approach for validation.

   • Validate your TAM, SAM, and SOM estimates using a bottom-up approach based on product pricing and expected sales volumes.

   • The template facilitates this approach, offering a more grounded and realistic market size estimation.

6. Finalize your market sizing.

   • Consolidate your findings into a comprehensive market sizing overview.

   • Utilize the template's visual tools to create charts and graphs for a clear presentation of your market potential.

Who is this template for?

Ideal for startup founders, entrepreneurs, product managers, and market analysts, this template serves anyone in need of a detailed and actionable market sizing analysis. Whether you're seeking to understand your market potential for a new venture, preparing for investor presentations, or planning strategic market entries, this template is your go-to resource.