Three circles, each inside the last.
Direct answer
TAM is the total market for a product category. SAM is the portion you can serve with your product and channels. SOM is the part you can realistically capture in the near term. The smaller numbers are usually more useful for planning.
Example
A meal planning app:
- TAM: everyone who buys groceries.
- SAM: busy parents in your country who use smartphones.
- SOM: parents you can reach in year one through your channels.
Tips
- Base SOM on realistic channels.
- Show your sources.
Where Teyro fits
Teyro's How to Validate a Business Idea course turns this into short lessons you can play in a few minutes a day. It has 50 lessons, and you can start free.
The bottom line
Start with SOM and work outward.
