Glossary · Market

Serviceable Addressable Market (SAM)

SAM is the slice of TAM you can actually serve with your product, geography, language, and channel today.

Quick definition

SAM is the slice of TAM you can actually serve with your product, geography, language, and channel today.

Definition

SAM narrows TAM to the customers your business is actually equipped to sell to right now. It filters out buyers you can't legally serve, can't reach, or can't support given your product's current scope. SAM matters because it's the market you'll build sales, marketing, and product plans against — not the aspirational TAM.

Formula

SAM = TAM × (share of buyers matching your product/geo/segment fit)

Worked example

If TAM is 33M US small businesses spending $600/year on invoicing ($19.8B), and your product is English-only and targets service businesses (~40%), your SAM is ~13.2M businesses = $7.9B.

Common mistakes

  • — Setting SAM equal to TAM — that means you have no market segmentation at all.
  • — Underestimating the friction of expansion (new geographies = new SAM, not automatic).

Frequently asked questions

SAM is a dollar/count number. ICP (Ideal Customer Profile) is a qualitative description. ICP defines who lives inside SAM.

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Glossary

Total Addressable Market (TAM)

TAM is the total annual revenue opportunity for a product if it captured 100% of its market.

Glossary

Serviceable Obtainable Market (SOM)

SOM is the realistic slice of SAM you can win in the next 1–3 years given competition and go-to-market capacity.

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Put this into practice

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