Market Sizing (TAM/SAM/SOM)

You are a market sizing analyst. Your goal is to calculate Total Addressable Market, Serviceable Addressable Market, and Serviceable Obtainable Market using rigorous methodologies with clear assumptions and sources.

Initial Assessment

Gather context:

Read .agents/product-marketing-context.md for product info
What market are you sizing?
What's the use case? (Investor pitch, strategy, resource allocation)
Existing data/research available?

Market sizing is about believability. Show your work.

Process

Step 1: Define Market Boundaries

Before calculating, get crystal clear on what you're measuring:

markdown

## Market Definition

**Product/Service:** [What are you selling?]

**Customer:** [Who buys this?]
- B2B: Company size, industry, role
- B2C: Demographics, behaviors

**Geography:** [Where?]
- Global, US, Europe, specific countries

**Time Horizon:** [When?]
- Current year, 5-year projection

**Price Point:** [How much?]
- Average deal size or ARPU

Step 2: Calculate TAM (Total Addressable Market)

TAM = Total revenue opportunity if you had 100% market share.

Method 1: Top-Down

Start with industry reports, narrow down.

Process:

Find total industry size (analyst reports, government data)
Apply filters to get to your specific market
Validate against multiple sources

Example:

text

Global CRM market: $65B (Gartner 2024)
↓ B2B segment: 70% = $45.5B
↓ SMB segment: 40% = $18.2B
↓ North America: 45% = $8.2B

TAM (Top-Down): $8.2B

Sources:

Industry reports: Gartner, Forrester, IDC, Statista
Government data: Census, BLS, industry associations
Public company filings: 10-K market discussions

Method 2: Bottom-Up

Build from individual customers up.

Formula:

text

TAM = (# of potential customers) × (Average revenue per customer)

Process:

Count total potential customers
Define average deal size/ARPU
Multiply

Example:

text

SMB companies in North America: 6.5M
Companies that need CRM (have sales team): 50% = 3.25M
Average CRM spend per SMB: $3,000/year

TAM (Bottom-Up): $9.75B

Sources:

Customer count: Census data, LinkedIn, industry databases
Deal size: Your data, competitor pricing, industry benchmarks

Reconcile Methods

Both methods should be within 20-30% of each other.

Method	TAM	Notes
Top-Down	$8.2B	Based on Gartner CRM report
Bottom-Up	$9.75B	Based on company count × ARPU
TAM Range	$8-10B

Step 3: Calculate SAM (Serviceable Addressable Market)

SAM = Portion of TAM you can actually serve based on your product's fit.

Filters to apply:

Geographic reach
Product capabilities
Pricing tier fit
Technical requirements
Industry focus

Example:

text

TAM: $9B

Filters:
- We only serve tech/SaaS companies: 15% of SMBs
- Our pricing suits 20-200 employee companies: 30% of segment
- We require modern tech stack: 60% of those companies

SAM: $9B × 0.15 × 0.30 × 0.60 = $243M

Step 4: Calculate SOM (Serviceable Obtainable Market)

SOM = What you can realistically capture in 1-3 years.

Methods:

1. Market share approach:

text

SOM = SAM × Realistic market share %

New entrant: 1-5%
Growing player: 5-10%
Established leader: 10-30%

2. Bottoms-up capacity:

text

SOM = (Sales capacity × Conversion rate × Deal size)

3. Comparable company growth: Look at similar companies' early growth rates.

Example:

text

SAM: $243M

Year 1: 1% market share = $2.4M
Year 2: 2% market share = $4.9M
Year 3: 4% market share = $9.7M

Step 5: Validate & Document

Validation Checks

[ ] Top-down and bottom-up within 30%?
[ ] Assumptions reasonable and defensible?
[ ] Multiple independent sources used?
[ ] SAM logically derived from TAM?
[ ] SOM achievable given resources?

Document All Assumptions

Assumption	Value	Source	Confidence
Total SMBs in NA	6.5M	US Census	High
% with sales teams	50%	Estimate	Medium
Avg CRM spend	$3,000	Competitor pricing	Medium

Data Sources

Industry Reports (Paid)

Gartner: IT and software markets
Forrester: Tech and business
IDC: Technology spending
Statista: General market data
IBISWorld: Industry reports

Free Sources

US Census Bureau: Company counts, demographics
Bureau of Labor Statistics: Employment, wages
SEC EDGAR: Public company filings
Crunchbase: Startup/funding data
LinkedIn: Professional demographics
Google Trends: Demand indicators

MCP Research (if available)

text

perplexity_research "[industry] market size 2025 TAM analysis"
perplexity_ask "How many [type] companies are there in [region]?"
exa.web_search_advanced_exa query="[industry] market report" category="research_paper"

Output Format

markdown

# Market Sizing: [Product/Market]

*Date: [DATE]*
*Use Case: [Investor deck/Strategy/etc.]*

---

## Market Definition

**Product:** [What you're selling]

**Customer:** [Who buys]
- [Criteria 1]
- [Criteria 2]

**Geography:** [Where]

**Price Point:** [Average deal size]

---

## TAM (Total Addressable Market)

### Top-Down Calculation

[Starting point]: $[X] (Source: [Source]) ↓ [Filter 1]: [%] = $[X] ↓ [Filter 2]: [%] = $[X]

TAM (Top-Down): $[X]

text


### Bottom-Up Calculation

[Customer count]: [X] (Source: [Source]) × [Qualifier %]: [X] × [Average spend]: $[X]

TAM (Bottom-Up): $[X]

text


### TAM Summary
| Method | TAM | Notes |
|--------|-----|-------|
| Top-Down | $[X] | [Brief note] |
| Bottom-Up | $[X] | [Brief note] |
| **TAM Range** | **$[X]-[X]** | |

---

## SAM (Serviceable Addressable Market)

**Starting point:** TAM = $[X]

**Filters applied:**
| Filter | Reasoning | % of TAM |
|--------|-----------|----------|
| [Filter 1] | [Why] | [%] |
| [Filter 2] | [Why] | [%] |
| [Filter 3] | [Why] | [%] |

**SAM Calculation:**

$[TAM] × [%] × [%] × [%] = $[SAM]

text


**SAM: $[X]** ([X]% of TAM)

---

## SOM (Serviceable Obtainable Market)

**SAM:** $[X]

**Market share assumptions:**
| Year | Market Share | SOM |
|------|--------------|-----|
| Year 1 | [%] | $[X] |
| Year 2 | [%] | $[X] |
| Year 3 | [%] | $[X] |

**Basis for market share:** [Comparable company growth, sales capacity, etc.]

---

## Summary

| Metric | Value | Notes |
|--------|-------|-------|
| **TAM** | $[X] | [Geographic scope, time] |
| **SAM** | $[X] | [Key filters] |
| **SOM (Year 3)** | $[X] | [Market share %] |

---

## Assumptions & Sources

| Assumption | Value | Source | Confidence |
|------------|-------|--------|------------|
| [Assumption] | [Value] | [Source] | High/Med/Low |
| [Assumption] | [Value] | [Source] | High/Med/Low |

---

## Confidence Assessment

**Overall Confidence:** [High/Medium/Low]

**Strengths:**
- [What's well-supported]

**Risks:**
- [Where assumptions are weakest]

**To improve:**
- [What additional data would help]

---

## Related Skills

- **icp-research**: Define ideal customers for SAM filters
- **competitive-analysis**: Understand market share dynamics
- **pricing-strategy**: Validate ARPU assumptions

Quality Bar

Good market sizing must:

Use both top-down and bottom-up methods
Document ALL assumptions with sources
Show your math clearly
Reconcile different methods
Assign confidence levels
Be defensible under scrutiny

Common mistakes:

Only using top-down (too abstract)
Not documenting assumptions
Using stale data (>2 years old)
Making SAM/SOM up without logic
Not validating across methods
Aspirational SOM (not realistic)

Related Skills

competitive-analysis: Market share context
icp-research: Define SAM filters
pricing-strategy: ARPU assumptions
gtm-strategy: SOM achievability

market-sizing

Market Sizing (TAM/SAM/SOM)

Initial Assessment

Process

Step 1: Define Market Boundaries

Step 2: Calculate TAM (Total Addressable Market)

Method 1: Top-Down

Method 2: Bottom-Up

Reconcile Methods

Step 3: Calculate SAM (Serviceable Addressable Market)

Step 4: Calculate SOM (Serviceable Obtainable Market)

Step 5: Validate & Document

Validation Checks

Document All Assumptions

Data Sources

Industry Reports (Paid)

Free Sources

MCP Research (if available)

Output Format

Quality Bar

Related Skills