Glossary entry
TAM
Also known as Total Addressable Market
The total revenue opportunity if every potential buyer in a market bought your product — the theoretical ceiling. The number every pitch deck quotes and most teams misuse: real TAM is bottom-up (count of accounts × ACV), not top-down (industry size from a Gartner report). Useful for fundraising and for sanity-checking strategy; nearly useless for tactical planning. SAM and SOM (serviceable / serviceable-obtainable) are the operational numbers.
01Definition
TLDR
The total revenue opportunity if every potential buyer in a market bought your product — the theoretical ceiling. The number every pitch deck quotes and most teams misuse: real TAM is bottom-up (count of accounts × ACV), not top-down (industry size from a Gartner report). Useful for fundraising and for sanity-checking strategy; nearly useless for tactical planning. SAM and SOM (serviceable / serviceable-obtainable) are the operational numbers.
02Why it matters
Boards ask for TAM; operators should ignore it once it's been established. Tactical sizing comes from SAM/SOM.
03Example
Worked example
$50B TAM for 'B2B sales tools' / $4B SAM for 'AI-native outbound for mid-market' / $400M SOM for 'first 3 verticals we'll target.'
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