Market Opportunity Assessment
TAM/SAM/SOM market sizing with validation
- • Clear TAM/SAM/SOM definitions and unit of measure (revenue or units).
- • Both top‑down and bottom‑up with triangulation and sources.
- • Explicit assumptions, sensitivity ranges, and confidence levels.
- • Realistic SOM based on GTM capacity and competition.
- • Link to pricing and unit economics (CAC/LTV) for credibility.
- • Confusing TAM with SAM and pitching the bigger number.
- • Only top‑down estimates with no bottom‑up reality check.
- • Double‑counting segments or mixing B2B and B2C totals.
- • Assuming Year‑3 market share without GTM constraints.
- • No sensitivity analysis—one number treated as gospel.
TAM vs SAM vs SOM—what's the quick difference?
TAM is the whole universe, SAM is the realistic segment you can serve, SOM is the slice you can actually capture in the time horizon with your GTM muscle.
Top‑down or bottom‑up—which should I use?
Both. Top‑down for sanity, bottom‑up for credibility. If they disagree by >25%, explain the gap or revisit assumptions.
How do I size a totally new category?
Proxy markets + bottom‑up unit assumptions. Start with who pays, how often, and how much. Show scenarios and adoption curves.
What's a reasonable Year‑3 share for SOM?
Often 1–3% unless you have a killer wedge or distribution advantage. Investors side‑eye anything >5% without evidence.
How often should I refresh the numbers?
Annually for stable markets, semi‑annually for fast‑moving categories. Refresh when pricing or target segment changes.
How do I validate assumptions with limited data?
Pilot surveys (use sample size calc), expert interviews, early cohort conversion. Mark assumptions clearly and track validation tasks.
Should I size in revenue or units?
Use both when possible. Units reveal adoption mechanics; revenue ties to pricing and ROI. Investors want to see the bridge.
How do I handle multi‑region markets?
Break out by region with different adoption rates and pricing. One global average hides reality.
What confidence level should I present?
State confidence by component: TAM (medium), SAM (medium‑low), SOM (low) unless validated. Add sensitivity bands and what would change your mind.
Investor says “too small.” Now what?
Show adjacent segments, pricing expansion, or wedge strategy that grows SOM. Small but winnable beats imaginary billions.
When to Use
Use this for investor decks, business cases, and quarterly planning when you need credible TAM/SAM/SOM with clear assumptions.
Pro Tips
- •Be specific with your variable inputs for better results
- •Review and iterate on the AI output as needed
- •Enable web search for the most current information
Expected Output
Market analysis with sizing calculations