Market Opportunity Sizing Calculator
Estimate TAM/SAM/SOM with the top-down or bottom-up (accounts × ACV) method.
Written by Golam Rabbani, Founder & Lead Engineer
How to use this market opportunity sizing calculator
- Pick the method: Top-down (industry × slice) or Bottom-up (accounts × ACV).
- For top-down, enter industry revenue plus your slice %, serviceable %, and obtainable %.
- For bottom-up, enter potential accounts, adoption %, ACV, serviceable %, and obtainable %.
- Press Size opportunity to get TAM, SAM, and SOM.
- Use Copy to grab the result for a pitch deck, or Reset to try a different scenario.
About this market opportunity sizing calculator
There are two industry-standard ways to size a market. The top-down method starts from published industry revenue and takes successive percentage slices: TAM = industry revenue × your slice%, SAM = TAM × serviceable%, SOM = SAM × obtainable%. The bottom-up method starts from demand: TAM = potential accounts × adoption% × ACV, then narrows the same way. Investors prefer bottom-up because it forces explicit assumptions; analysts often start top-down to sanity-check magnitude. ("Marketing Metrics" by Farris et al. is the canonical reference.)
Worked example (bottom-up). You sell B2B HR software. There are 100,000 mid-market companies in your geography. Adoption (companies that would use HR software at all) is 25%; ACV is $5,000. TAM = 100,000 × 25% × $5,000 = $125,000,000. Reachable today via your channels (serviceable %) = 40% → SAM = $50,000,000. Your three-year capture rate (obtainable %) = 5% → SOM = $2,500,000. Investors will probe each of the four percentages, so use defensible sources for each.
Whenever possible, present both methods and explain the gap — a 2-3× gap is normal; a 10× gap means at least one assumption is wrong.
FAQ
- Which method should I use?
- Use both and triangulate. Top-down validates that your sector is large enough; bottom-up validates that demand is real. Investor decks typically lead with bottom-up and reference top-down as a sanity check.
- What is ACV and how is it different from ARPU?
- ACV (annual contract value) is what one account pays per year. ARPU (average revenue per user) averages revenue across all paying users, which may differ if accounts have multiple seats. Use ACV for B2B, ARPU for B2C or seat-based sizing.
- How do I find the industry revenue number for top-down?
- Public sources like IBISWorld, Statista, Gartner, or company 10-K filings often publish category-level revenue. For niche markets, sum the revenue of the 5-10 largest competitors and multiply by ~2 as a proxy.
- Why do my top-down and bottom-up numbers differ?
- Top-down captures everyone in the category; bottom-up usually narrows by ICP (ideal customer profile). A 2-3× gap is normal. A 10× gap usually means one method is using a wrong filter — find the inconsistency before presenting.
- Can I size only TAM and skip SAM/SOM?
- TAM alone is rarely persuasive. SAM and SOM force you to commit to a channel strategy and a near-term target, which is what investors actually fund.
- Does this tool save my inputs?
- No. All sizing is computed in your browser; nothing is uploaded or stored.