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Market Size Estimator

Compute TAM, SAM, and SOM from audience size, addressable %, serviceable %, share %, and ARPU.

Written by Golam Rabbani, Founder & Lead Engineer

Top-of-funnel reach for your category.

Percent who could ever use your product.

Percent you can actually reach today.

Realistic share you can win in 3-5 years.

Average revenue per customer per year.

How to use this market size estimator

  1. Enter the total population or audience you start from.
  2. Enter the percentage of that audience that is addressable (TAM filter).
  3. Enter the percentage of TAM you can realistically reach today (SAM filter).
  4. Enter the share of SAM you expect to win in 3-5 years (SOM filter).
  5. Enter annual ARPU per customer, then press Estimate market size.

About this market size estimator

Market size estimation expresses an opportunity as three nested numbers: TAM (Total Addressable Market) is total demand if you served everyone; SAM (Serviceable Available Market) is the slice you can actually reach with your current product and channels; SOM (Serviceable Obtainable Market) is the realistic share you expect to capture. The widely-used formulas (e.g. in "Crossing the Chasm" and CB Insights playbooks) are TAM = audience × addressable% × ARPU, SAM = TAM × serviceable%, and SOM = SAM × obtainable%.

Worked example. US population 330,000,000 × 15% addressable = 49,500,000 potential customers. At an annual ARPU of $120, TAM = 49.5M × $120 = $5.94B. If you can reach 40% of TAM through your current channels, SAM = $5.94B × 40% = $2.38B. If you expect a 5% obtainable share, SOM = $2.38B × 5% = $118.8M — that is your three-to-five-year revenue ceiling under these assumptions.

TAM/SAM/SOM is only as honest as your filters. Show the math when presenting to investors so they can stress-test each percentage.

FAQ

What is the difference between TAM, SAM, and SOM?
TAM is the total demand for your category if every potential customer bought. SAM is the slice you can reach with today's product and distribution. SOM is the share of SAM you can realistically win — your near-term revenue target.
How accurate is this estimate?
It is a back-of-envelope estimate, not a forecast. Three filters compounded multiplicatively amplify errors quickly. Use it to triangulate with a bottom-up estimate (accounts × ACV) and pick the more defensible number.
Should I use annual or monthly ARPU?
Use annual ARPU for TAM/SAM/SOM so the result is comparable to annual revenue. If you only know monthly ARPU, multiply by 12 before entering.
What if I do not know the addressable percentage?
Reason from segment data: industry reports, census data, or your own customer research. A common starting point is the share of the audience that has the problem you solve and the willingness to pay for it.
Is 5% a realistic SOM share?
It depends on category maturity, competition, and your distribution. Series A startups often target 1-5% within five years; category leaders may capture 20-40% over a decade. Be conservative on day one.
Does this tool store my numbers?
No. The calculation runs entirely in your browser. Nothing is uploaded, logged, or saved.