How to Define Your TAM, SAM, and SOM

Understanding your target market is the cornerstone of building a successful technology startup. Yet, many founders struggle to define the true size of their market, often falling prey to inflated numbers or vague assumptions. Grasping the concepts of TAM (Total Addressable Market), SAM (Serviceable Available Market), and SOM (Serviceable Obtainable Market) is not just an investor’s checkbox; it’s a practical tool to shape your strategy, product development, and ultimately, your impact in the industry.

“Clarity about your market size is a gift to your startup journey; it saves you time, money, and heartache.”

Why Market Sizing Matters—Beyond the Pitch Deck

It’s tempting to treat market sizing as a formality—a single slide to impress investors. But for founders, especially those in technology or anyone building solutions for neurodivergent learners or women in tech, a grounded understanding of TAM, SAM, and SOM is essential for:

• Prioritizing features and development resources
• Aligning your product with the real needs of your audience
• Justifying the value and viability of your startup to partners, team members, and yourself
• Building a sustainable business model

Market sizing isn’t about inflating numbers—it’s about focusing your energy where it counts.

What are TAM, SAM, and SOM?

Let’s break down these three terms with clarity and precision.

TAM — Total Addressable Market

This is the largest possible market for your product or service, assuming there are no constraints—geographical, regulatory, or otherwise. Think of TAM as the universe of all potential users or customers, calculated under the most optimistic scenario.

For example, if you are building an adaptive learning platform for neurodivergent students, your TAM could be all students worldwide who might benefit from personalized educational technology.

SAM — Serviceable Available Market

SAM narrows the funnel. It represents the segment of the TAM that your current product can serve, considering factors like language, region, platform compatibility, and specific needs. For our learning platform, SAM might be all neurodivergent students in English-speaking countries with internet access.

SOM — Serviceable Obtainable Market

SOM is the slice of the SAM that you can realistically reach in the near term, based on your current resources, sales channels, and competition. This is the market you can actually win given your current capabilities. If you’re launching your product in the UK and US first and partnering with five local school districts, your SOM is those specific students you can access in your initial launch phase.

Think of TAM as your dream, SAM as your opportunity, and SOM as your reality check.

How to Calculate TAM, SAM, and SOM

There are two main approaches to market sizing: top-down and bottom-up. Each has its place in your toolkit, but for most early-stage startups, a bottom-up approach offers the most credible results.

Top-Down Analysis

This method starts with industry-wide reports or large-scale data (from sources like Gartner, IDC, or government statistics) and then narrows down. For example, if Gartner reports that the global EdTech market is worth $300 billion, you might estimate what percentage of that market your product addresses. While this approach is fast, it can be misleading—especially if your assumptions aren’t grounded in your actual value proposition.

Bottom-Up Analysis

The bottom-up approach starts with specifics—how many customers can you reach, at what price, through which channels? For a SaaS platform, you might ask:

• How many target users are in my launch geography?
• What percentage can I realistically convert in the first 3 years?
• What is my average revenue per user?

Multiply these together to arrive at your SOM, then work backwards to estimate your SAM and TAM.

Bottom-up numbers are smaller, but they are more believable—and that’s what matters to both you and your investors.

Practical Example: A Learning Platform for Neurodivergent Students

Let’s bring this to life with a concrete scenario:

• TAM: There are approximately 1.5 billion students worldwide. If 15% are neurodivergent, TAM = 225 million students.
• SAM: Your platform currently supports only English and is available in the US, UK, and Canada. There are 50 million neurodivergent students in these countries combined. SAM = 50 million.
• SOM: You plan to partner with 20 school districts in your first year, each serving 10,000 neurodivergent students. SOM = 200,000 students.

Notice the dramatic difference between TAM, SAM, and SOM. This progression—from the dream to the doable—is essential for making realistic plans and building trust.

Common Mistakes in Market Sizing

Even experienced founders can fall into traps when estimating their market size:

• Overestimating TAM by including irrelevant segments. If your product is for adult learners, don’t include K-12 in your TAM.
• Assuming 100% market penetration is possible. No matter how great your product, competitors, regulations, or user preferences limit your reach.
• Confusing TAM and SAM. Investors can spot “wishful thinking” a mile away. Be precise about what your product can actually serve right now.
• Ignoring the importance of SOM. This is often the number that matters most for operational planning and early-stage validation.

Precision is not pessimism; it’s the foundation of a credible, investable business.

The Role of Market Sizing in Technology and Diversity

For founders working on products that support women in technology or neurodivergent learners, market sizing has another, more profound role: challenging assumptions and uncovering underserved markets.

Societal biases and a lack of data often obscure the true size and potential of markets that are not mainstream. For example, women in tech might be undercounted in traditional IT statistics, or neurodivergent learners might be overlooked in “general education” numbers. Digging deeper—by connecting with advocacy groups, analyzing school or workforce participation rates, and combining multiple data sources—can reveal a market opportunity that others have missed.

Market Sizing as Advocacy

When you accurately define and communicate the size of an underserved market, you don’t just strengthen your business case—you also raise visibility for the communities you care about. This is particularly important in technology, where innovation can so easily overlook those outside the mainstream narrative.

Your commitment to inclusive research helps reframe the conversation, bringing new resources and opportunities to those who need them most.

Tools and Data Sources for Market Sizing

You don’t have to start from scratch. There are a variety of tools and resources available to help you with your calculations:

• Industry Reports: Look for up-to-date reports from organizations like Statista, Gartner, or the World Bank.
• Government and NGO Data: U.S. Census, UNESCO, OECD, and similar sources provide detailed demographic and educational data.
• Professional Associations: Groups like Women Who Code or the International Dyslexia Association often publish membership and target audience statistics.
• Surveys and Interviews: Sometimes, your best data comes from direct engagement—surveying potential users or interviewing stakeholders in your field.

The best market sizing efforts combine quantitative rigor with qualitative insight. Numbers tell part of the story, but context and nuance are equally important.

Real-World Applications: How TAM, SAM, and SOM Shape Strategy

Market sizing isn’t just an academic exercise; it shapes real decisions every day in a startup’s life:

• Product Roadmap: If your SOM is concentrated in a particular sector, prioritize features for that audience first.
• Go-to-Market: A clear SOM helps you choose which partnerships, distribution channels, or marketing efforts to invest in.
• Funding Strategy: Investors will want to see that your initial target market is big enough to justify their investment, but not so broad that your approach seems unfocused.
• Team Building: Understanding your SAM and SOM can help you recruit team members with relevant expertise—whether that’s educators, technologists, or community advocates.

Market sizing isn’t about playing it safe—it’s about playing it smart, so you can build, learn, and expand with confidence.

Embracing the Iterative Nature of Market Sizing

Your TAM, SAM, and SOM are not static numbers; they evolve as your product, team, and the world around you change. New technologies, shifting regulations, and emerging user needs can all expand or contract your market.

The best founders revisit their market sizing regularly, using new data and lived experience to refine their understanding. For those working in fast-moving fields like AI, EdTech, or diversity-focused startups, this agility is even more critical.

Listen, Learn, Adjust

Behind every number is a real person—a student, a developer, a teacher, a parent—whose needs and aspirations may change over time. The most successful companies keep listening, learning, and adjusting their market models accordingly.

Final Thoughts: Turning Insight into Impact

Defining your TAM, SAM, and SOM is an act of care—for your users, your team, and your mission. It demands both analytical rigor and empathetic curiosity. When done thoughtfully, it helps you avoid chasing mirages and instead focus on building something meaningful for those who need it most.

In technology, especially when serving underrepresented or neurodiverse communities, market sizing is more than just a number—it’s a compass. Use it to navigate wisely, advocate boldly, and create the change you wish to see.