Brutal truth:
Your "billion-dollar idea" might be worth millions.(Or just thousands.)
➡️ Master TAM, SAM, and SOM in 2 minutes.
Think of it like this:
-TAM = Everyone on Earth who could buy pizza
-SAM = People in cities where you can deliver
-SOM = Houses you'll actually reach this year
Real examples that'll blow your mind:
Uber's journey:
• TAM: $5.7 trillion (all transportation)
• SAM: $1.5 trillion (legal rideshare cities)
• SOM: $150 billion (their 5-year target)
Netflix's reality:
• TAM: $2.8 trillion (all entertainment)
• SAM: $500 billion (streaming-ready countries)
• SOM: $75 billion (450M subscribers)
Zoom's focus:
• TAM: $64 billion (all business tools)
• SAM: $25 billion (video-ready companies)
• SOM: $10 billion (enterprise clients)
Notice the pattern?
Each step gets smaller.Each step gets more real.Each step gets more achievable.
Why this matters to YOU:
✓ Investors need all three numbers
✓ TAM shows the dream
✓ SAM shows you're realistic
✓ SOM shows you can execute
Common mistakes that kill startups:
❌ Using TAM for revenue projections
❌ Ignoring competition in SOM
❌ Making SAM too big
❌ Forgetting regulations
The reality check:
• Most startups capture 1-5% of SAM
• It takes 5-10 years
• Competition limits everyone
• Some customers never switch
But here's the secret:
Knowing your real SOM is a superpower.It helps you:
→ Set honest goals
→ Raise the right funding
→ Hire the right team
→ Pick the right strategy
Start with SOM and work backwards.
Not the other way around.
Your "small" SOM might be perfect.
A $10M business changes lives.
A $100M business creates dynasties.
Stop chasing someone else's TAM.
Start building your SOM.
Save this breakdown.Share it with a founder friend.Use it in your next pitch.