Total addressable market

How it is used

Usually called TAM and often shown with SAM (serviceable addressable market, the part you can actually serve) and SOM (serviceable obtainable market, the part you can realistically win). Investors check that the TAM is large enough and sensibly calculated, not just copied from a report.

Example sentences

1. Our total addressable market (TAM) is about 4 billion dollars a year in Europe.

2. The investor said the total addressable market was too small for a venture-scale return.

Common collocations

• TAM, SAM and SOM
• size the market
• large addressable market
• bottom-up TAM

Related terms

• target marketThe specific group of customers a business plans to sell to first, described by features such as industry, location, size, age or needs.
• venture capitalMoney that professional funds invest in young, fast-growing companies in exchange for equity, accepting high risk in the hope that a few big winners pay for the losses.
• pitch deckA short slide presentation, often 10 to 20 slides, that explains a startup's problem, solution, market, team, numbers and funding needs to investors.
• scaleTo grow a business quickly to many more customers, markets or sales without costs and effort growing at the same speed.

More terms: Ideas & Business Models

• startup
• business model
• value proposition
• pain point
• competitive advantage
• moat
• SaaS
• freemium
• subscription model
• marketplace
• B2B
• first-mover advantage