TAM SAM SOM calculator — bottom-up market sizing for founders

About this calculator

Counts the buyers you could realistically reach, applies an honest conversion rate, multiplies by your price — and gives you a year-1 SOM revenue number you can actually defend. Use this before you commit to a build, when you're stress-testing whether a niche is big enough. Garbage buyer = garbage SOM, so be specific about who you're counting.

Your numbers

Reachable buyers (your SAM)

Buyers you can realistically reach through your channels and geo.

Conversion rate

Be honest. 1-3% cold, 5-15% warm, 20-40% strong audience.

Annual price per customer

Annual contract value. For monthly plans, multiply by 12.

The verdict

Year-one SOM (revenue)

$360K

1,500 customers

Niche. Profitable as a solo founder; tight for a venture-backed team. Tighten the wedge or expand later.

Customers

1,500

Annual price

$240

How this is calculated

SOM = reachable_buyers × (conversion_rate / 100) × annual_price_per_customer.

The result is your year-one Serviceable Obtainable Market in revenue terms — what you can earn in the first 12 months if you hit your conversion target on the buyers you can actually reach.

Assumptions baked in:

Every customer pays the full annual price (no discounts, no churn within year one).
Conversion is uniform across the buyer pool (in practice it's not — early adopters convert higher).
You ignore the rest of the TAM. SOM, not TAM, is what your runway needs to match.

Verdict tiers are calibrated against typical bootstrapped vs venture economics: under $250K SOM a market won't pay for a team; $2M-$20M is the sweet spot for a real business that incumbents won't crush.

What this doesn't tell you

Whether buyers want it. A $5M SOM with zero demand evidence is still zero customers. Use idea validation, not just market sizing.
Whether you can actually reach them. SAM assumes channel-market fit. If your CAC > LTV you can't profitably acquire any of these buyers.
How fast you'll get there. Year-one SOM is a ceiling, not a forecast. Most pre-PMF startups hit 5-15% of SOM in year one.

Use this with

Framework

Jobs to be Done (JTBD)

Jobs to be Done reframes every product decision: customers don't buy features, they hire products to get a job done. Here's how to apply it without faking it.

Spoke

Market Research

Most founder market research is a TAM slide that nobody believes. The numbers that actually matter are smaller, harder to defend, and tell you whether the market exists for the ten-customer version of your business.

Question

What is TAM, SAM, SOM?

Three nested market-sizing numbers. TAM (Total Addressable Market) is the entire global demand for the category. SAM (Serviceable Addressable Market) is the slice you could serve given your channels and geography. SOM (Serviceable Obtainable Market) is what you could realistically capture in 1-3 years. Most founders inflate TAM and skip SOM. The honest move is the opposite: start at SOM, work up. The ten-customer version of your business is more useful than the $10B TAM slide nobody believes.

Frequently asked questions

What's the difference between TAM, SAM, and SOM?

TAM is the total addressable market — every possible buyer for the category. SAM is the segment you can actually reach with your product, channels, and geo. SOM is the slice you can realistically capture in year one. Most founders inflate TAM and skip SOM. The number that matters is SOM — that's what your runway, your team, and your funding need to match.

Why only three inputs? Other calculators ask for ten.

Because anything past three inputs is fake precision. You don't know your real conversion rate before you launch — you're estimating. Three inputs make the assumption explicit and let you sensitivity-test by changing one at a time. Eight inputs hide the assumptions and make the answer feel more credible than it is.

What conversion rate should I assume?

If you have no data: 1-3% for cold outbound or paid ads, 5-15% for warm inbound, 20-40% for a strong existing audience. Pick the worst of the three plausible numbers and run the calc. If the math still works, you have a business. If it only works at your best-case conversion rate, you don't.

Does this account for churn and expansion revenue?

No. This is a year-one SOM estimate — the gross annual revenue if you hit your conversion target on your reachable buyers. For LTV, churn, and expansion, use the CAC/LTV ratio calculator. SOM tells you whether the market is big enough; CAC/LTV tells you whether the unit economics work.

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