Market Sizing Calculator
Calculate your TAM, SAM, and SOM using a top-down or bottom-up method.
How this is calculated
Top-down starts from your total market (TAM) and narrows it by percentage — your serviceable segment (SAM), then your realistic Year 1 capture (SOM). Bottom-up instead builds up from actual customer counts: SAM is your total target customers times revenue per customer, SOM applies your expected conversion rate, and TAM is estimated by assuming SAM represents about 10% of the total market.
VCs typically look for a TAM of at least $1B and a SAM of at least $100M, since a fund-returning exit usually requires the company to plausibly reach $100M+ in revenue. The sanity checks above flag common over-optimistic assumptions — most startups capture well under 5% of their SAM in the early years, so implied market share above 10-30% is worth revisiting.
Frequently asked questions
- What is TAM?
- Total Addressable Market — the total revenue opportunity if you captured 100% of the market.
- What is SAM?
- Serviceable Addressable Market — the portion of TAM your product can actually serve, given geographic, regulatory, or technical limitations.
- What is SOM?
- Serviceable Obtainable Market — the realistic slice of SAM you can win given competition, sales capacity, and resources.
- Top-down vs bottom-up — which is better?
- Bottom-up is generally more credible to investors because it is grounded in actual customer counts and unit economics. Top-down works well for initial framing but is easier to inflate with optimistic percentages.
- Why do VCs care about TAM?
- VCs need the potential for a 10× return. A $1B+ TAM lets a company realistically grow to $100M+ revenue at just 10% share, which can justify a venture-scale outcome for the fund.
- My TAM is under $1B — should I give up?
- Not necessarily. Niche markets can support highly profitable lifestyle or growth-equity businesses. Venture capital is not the only path to a successful company.
- What CAGR should I use?
- Use a third-party market research estimate for your specific sector where possible. 10% is a conservative default for tech markets broadly; healthcare grows at roughly 6%, while SaaS infrastructure can run 15-20%.
- Is SOM the same as Year 1 revenue?
- Not exactly. SOM is the market opportunity you are targeting; actual revenue depends on how efficiently you capture it. SOM is what is theoretically capturable, not guaranteed.
- Can I use this in my own app?
- Yes — every calculator on Stupidly Clever has a matching REST API and MCP tool that runs the same underlying logic.