How to use this calculator
When investors ask for your "Market Size," they aren't looking for a single massive number. They are looking to see if you understand the difference between the total market and the slice you can actually capture. That is why they ask for TAM, SAM, and SOM.
1. Total Addressable Market (TAM)
TAM is the absolute maximum revenue your business could generate if you captured 100% of the market. To calculate this, take the total number of potential customers in the world and multiply it by your Annual Revenue Per User (ARPU).
Example: If you sell software to coffee shops for $1,000/year, and there are 1 million coffee shops globally, your TAM is $1 Billion.
2. Serviceable Available Market (SAM)
You cannot realistically sell to the entire globe on day one. SAM represents the portion of the TAM that you can actually reach with your current business model, language, and sales channels.
Example: If you only support English and your sales team is only in North America, your SAM might be the 200,000 coffee shops in the US and Canada (a $200M SAM).
3. Serviceable Obtainable Market (SOM)
This is the most important number. SOM is the realistic slice of the SAM that you can capture in the next 3-5 years, accounting for competitors, your marketing budget, and conversion rates. A good rule of thumb is aiming for 1% to 5% of the SAM for an early-stage startup.
Example: If you capture 5% of the North American coffee shops, you have 10,000 customers. Your SOM is $10 Million.
Why a big TAM is a trap
Many founders fail because they target a $100 Billion TAM but forget to check if those customers actually want a new solution. A massive market filled with entrenched competitors and low willingness to pay is a terrible place to build a startup.
Before you put a TAM slide in your pitch deck, you must validate that the pain point is real. That is where Olune comes in. We deploy autonomous agents to scrape Reddit and search volume to prove that your market isn't just large—it is actually desperate for your solution.