TAM SAM SOM is a three-layer way to size a market. TAM, the total addressable market, is the annual revenue if every potential customer bought your product. SAM, the serviceable available market, is the part your current product, channels and geography can serve. SOM, the serviceable obtainable market, is the part of SAM you can realistically win in a stated period, usually three years.

How do you calculate TAM, SAM and SOM?

Multiply a count of customers by the annual revenue per customer at each layer. TAM uses every potential customer, SAM the customers left after filters for segment, size and geography, and SOM the customers you can win in the period. In the fictional PawLedger example: 40,000 × $3,600 = $144.0M, 12,000 × $3,600 = $43.2M and 480 × $3,600 = $1.73M.

How do you calculate SOM?

Take a target share of SAM for a stated period, convert it to customers, then cap it at your sales capacity: reps × deals per rep per month × months. Multiply the smaller number by the annual price. For PawLedger, 4% of 12,000 clinics is 480, capacity is 2 × 7 × 36 = 504, so the SOM is 480 × $3,600 = $1.73M ARR in year three.

What is the difference between top-down and bottom-up market sizing?

Bottom-up counts the potential customers and multiplies by the annual revenue per customer. Top-down starts from a published industry total and applies percentage filters for product, region and segment. Present the bottom-up number, use top-down as the cross-check, and explain any gap larger than about 20% before the slide goes out.

Is TAM the same as market size?

Not exactly. Market size in an industry report usually means what customers spend today across all vendors and prices. TAM is what your product could earn at your price if every potential customer bought it. They match when your price is close to the market average, and differ when you sell a cheaper or premium product.

How do you show market size in a pitch deck?

Use one slide with a finding as the title, the three layers as nested rings or bars with values and customer counts, a formula under each value (customers × price), one line with the top-down check, and a source line with publisher and year. Place it after the solution slide and keep the full ledger ready as backup.

Should the TAM SAM SOM circles be drawn to scale?

Usually not, and it does not matter if the values are printed on each ring. Drawn to scale by area, a SAM of 30% of TAM has 55% of its radius and a SOM of 1.2% only 11%, too small to label. If you want proportions to be visible, use three horizontal bars instead of circles.

TAM SAM SOM: How to Calculate and Present Market Size (Template)

TAM SAM SOM — NOXI guide cover: market size calculated as customers times price at three nested layers, cross-checked top-down and presented on one traceable slide

Disclosure: NOXI publishes this guide and is one of the tools it mentions; the method works in any presentation software.

Quick answer: TAM (total addressable market) is the annual revenue you could earn if every possible customer bought your product. SAM (serviceable available market) is the part of it your product, channels and geography can serve today. SOM (serviceable obtainable market) is the part of SAM you can realistically win in a stated period, usually three years. Calculate each as customers × annual revenue per customer, then check the total against a top-down estimate.

The worked example is fictional: PawLedger, practice-management software for veterinary clinics in one sales region. Its figures are invented for teaching, and every calculation is shown so you can check it or rerun it with your own numbers.

In short

One formulaEvery layer is a count of customers × annual revenue per customer; only the count shrinks from TAM to SAM to SOM.
Bottom-up firstCount real accounts and multiply by your price. Use a published industry total only as the cross-check.
The 20% checkIf top-down and bottom-up differ by more than about 20%, explain the gap before you present either number.
SOM is capacityA SOM must fit what your team can sell: reps × deals per rep per month × months.
Traceable slideShow the rings, the formula under each figure and a dated source line. A number nobody can trace gets discounted.
ExamplePawLedger: TAM $144.0M, SAM $43.2M, SOM $1.73M ARR in three years; top-down check $165M, a 14.6% gap.

What TAM, SAM and SOM mean

TAM, SAM and SOM are three nested estimates of the same market: everything your product could ever sell (TAM), the part you can serve with today's product and channels (SAM), and the part you can realistically win in a stated period (SOM). Each is an annual revenue figure, in one currency, for one year.

Definition What is TAM (total addressable market)? Total addressable market is the annual revenue a product could earn if every potential customer bought it at its price, that is, at 100% market share and with no competitor. It is calculated as the number of potential customers × the annual revenue per customer.

Definition What is SAM (serviceable available market)? Serviceable available market is the part of the TAM that the company's current product, business model, sales channels and geography can actually serve. It uses the same price as the TAM, applied to a smaller count of customers.

Definition What is SOM (serviceable obtainable market)? Serviceable obtainable market is the part of the SAM that the company can realistically win within a stated period, usually three to five years, given competition and its own sales capacity. It is a revenue target for your company, not a description of the market.

These wordings follow the standard usage: TechTarget defines TAM as revenue "at 100% market share, as if no competition exists", SAM as the portion of TAM a company's products and services can serve, and SOM as the portion of SAM that can be realistically captured (TechTarget, TAM SAM SOM). You will also see SOM expanded as "share of market" and SAM as "serviceable addressable market"; the meaning is the same.

Three conventions make the numbers comparable, and most bad market slides break at least one of them:

Annual revenue. State every layer per year. A one-time hardware sale is converted with the replacement cycle (a $300 device replaced every three years is $100 a year).
One price. Use the same annual revenue per customer on all three layers unless a segment truly pays a different price, and then show the segments separately.
One year and one currency. Write "2026, USD" on the slide. A 2021 report and a 2026 customer count on the same slide describe two different markets.

Three nested rings for the fictional PawLedger example, each with its formula: TAM $144.0M equals 40,000 clinics times $3,600 a year; SAM $43.2M equals 12,000 serviceable clinics times $3,600; SOM $1.73M ARR equals 480 clinics won in three years times $3,600. Only the customer count changes from ring to ring. — Every ring is the same formula, customers × annual price; only the count of customers narrows from TAM to SAM to SOM.

TAM vs market size: are they the same?

Not quite. "Market size" in an industry report usually means what customers spend today on a category, across every vendor and price point. TAM is what your own product could earn at your own price if every potential customer bought it. The two are close when your price is close to the market average, and they diverge when you sell a cheaper or premium product. That difference is exactly what the top-down cross-check later in this guide makes visible.

The three formulas: bottom-up, top-down and value-based

There are three ways to size a market: bottom-up (count customers and multiply by price), top-down (take a published industry total and narrow it with percentage filters) and value-based (estimate the money your product saves or earns each customer). Use bottom-up as the number you present, top-down as the check, and value-based when the category is too new to have spend data.

Definition What is bottom-up vs top-down market sizing? Bottom-up market sizing counts the potential customers and multiplies that count by the annual revenue per customer. Top-down market sizing starts from a published total for an industry or region and applies percentage filters until only the relevant slice remains.

Method	Formula	Best for	Main weakness
Bottom-up	Number of potential customers × annual revenue per customer	The number you present; every input can be checked	Counting the customers takes real research
Top-down	Published industry total × share that matches your product × share in your geography and segment	A fast cross-check against an independent figure	Each filter is a guess, and the base report may define the category differently
Value-based	Number of potential customers × annual value your product creates for each	New categories with no spend history; testing price headroom	It measures value created, not money customers will pay

Investors and accelerators say the same. Y Combinator's demo day guidance calls the opportunity slide "usually expressed as a total addressable market (TAM)" and says it is better to be concrete and bottom-up than vague and top-down (Y Combinator, A Guide to Demo Day Presentations). The University of Regina's market-size template uses the bottom-up form directly: TAM = number of accounts in a market × annual contract value (University of Regina, How to calculate market size).

Bottom-up: customers × annual revenue per customer

Bottom-up sizing has two inputs, and each one needs its own source. The count comes from a register or a census: business establishment counts by industry and size class, licensing bodies, membership directories, school or hospital registers, household statistics. The annual revenue per customer comes from your own price list, signed contracts or pilot pricing, converted to a yearly figure. In the United States, the Census Bureau's County Business Patterns reports the number of establishments by industry and employment size (US Census Bureau, County Business Patterns); in the European Union, Eurostat's structural business statistics cover enterprises by activity and size class (Eurostat, Structural business statistics). Size classes matter, because most SAM filters are size filters.

Top-down: industry total × filters

Top-down sizing starts with a spend figure from an analyst report, a trade association or a public company's filings, then narrows it: the share of spend that goes to products like yours, the share in your region, the share in your customer segment. Write every filter as a percentage with its own reason. A top-down chain with four unexplained filters is not evidence; it is the bottom-up number in disguise, reverse-engineered to land where the founder wanted.

Value-based: customers × value created

Value-based sizing asks what the problem costs each customer today. If your product saves a clinic six staff hours a week at $25 an hour, the value is 6 × $25 × 52 = $7,800 a year per clinic. Multiplied across 40,000 clinics, that is a $312M value pool. It is not a TAM, because no customer pays 100% of the value it receives, but it tells you whether your price has room: at $3,600 a year, PawLedger charges 46% of the value it creates ($3,600 ÷ $7,800).

Worked example: sizing PawLedger step by step

A complete market sizing runs in five steps: count the potential customers, price them (TAM), filter to the ones you can serve (SAM), set a share you can win and test it against sales capacity (SOM), then cross-check the TAM top-down. Here is each step with its arithmetic.

Example PawLedger (fictional) sells cloud practice-management software to veterinary clinics: appointments, medical records, billing and stock. It sells in one fictional sales region at a list price of $300 a month per clinic, so $3,600 a year. It has two account executives, each closing about seven clinics a month. All counts, prices and report figures below are invented for illustration.

Step 1: TAM, every clinic at PawLedger's price

The region has 40,000 veterinary clinics (in a real deck, the count would come from an establishment census or a veterinary licensing register). Every clinic needs practice-management software, so every clinic is a potential customer.

TAM = 40,000 clinics × $3,600 a year = $144,000,000, or $144.0M a year.

Step 2: SAM, the clinics PawLedger can serve today

SAM applies the filters that describe today's product and go-to-market. Each filter has a reason a reviewer can accept or reject:

Filter	Clinics left	Share kept	Why the filter exists
All clinics	40,000	100%	Starting count, same as the TAM
Independent	32,000	80%	The 8,000 group-owned clinics buy centrally under enterprise contracts PawLedger cannot serve yet
3+ vets	15,000	46.9%	Smaller clinics rarely pay $300 a month; the product's scheduling and stock features need volume
Countries served	12,000	80%	The product has local billing, tax and language support in the countries holding 80% of these clinics

SAM = 12,000 clinics × $3,600 = $43,200,000, or $43.2M a year, which is 30% of the TAM (12,000 ÷ 40,000).

Step 3: SOM, a share of SAM that sales capacity can deliver

PawLedger sets a three-year target of 4% of SAM: 0.04 × 12,000 = 480 clinics. SOM = 480 clinics × $3,600 = $1,728,000 of annual recurring revenue (ARR) at the end of year three, or $1.73M. That is 1.2% of the TAM.

The share is only credible if the team can sell it. Two checks:

Capacity. Two reps × 7 clinics a month × 36 months = 504 clinics of selling capacity. The target needs 480 ÷ 36 = 13.3 new clinics a month, against a capacity of 14. The plan fits, with 24 clinics (5%) of headroom for churn: if more than 24 of the won clinics leave within three years, PawLedger needs a third rep or a lower SOM.
Pipeline. At a 20% win rate, 480 wins need 2,400 qualified opportunities, that is, 20% of the 12,000 serviceable clinics must enter the pipeline over three years, about 67 a month. That is the marketing target the SOM implies, and a reviewer will ask for it.

The SOM is the smaller of the share-based number and the capacity-based number. At 5% of SAM, the share-based figure is 600 clinics, but capacity stops at 504, so the honest SOM would be 504 × $3,600 = $1,814,400, not $2.16M:

Share of SAM	Clinics (share)	Capacity cap	SOM used
3%	360	504	360 × $3,600 = $1.30M
4% (plan)	480	504	480 × $3,600 = $1.73M
5%	600	504	504 × $3,600 = $1.81M (capacity-bound)

Step 4: the top-down check

A (fictional) industry report puts veterinary clinic software spend in the region at $1.1B a year, of which practice-management systems take 15%. Top-down TAM = $1,100M × 15% = $165.0M. Bottom-up gave $144.0M. The gap is $21.0M, or 14.6% of the bottom-up figure ($21.0M ÷ $144.0M).

Step 5: value headroom

At 6 hours saved a week × $25 an hour × 52 weeks = $7,800 of value per clinic a year, PawLedger's $3,600 price captures 46% of the value it creates. The price is defensible, and a reviewer who suspects the TAM is inflated by an optimistic price can see that it is not.

The cross-check: when top-down and bottom-up disagree

Compare the two estimates before you present either. A gap within about 20% of the bottom-up figure means the inputs are broadly consistent; a larger gap means one estimate counts different customers, a different price or a different category, and you must find which before the slide is credible. The 20% threshold is a working rule used in this guide, not an industry standard.

Measure the gap as (top-down − bottom-up) ÷ bottom-up, so that you always measure against the number you will defend. Then explain it. A gap is rarely an error to average away; it usually points at a segment that the two methods treat differently.

In the PawLedger example, the 14.6% gap is inside the threshold, but it still has a cause worth one line on the slide. The report measures what clinics spend, and the 8,000 group-owned clinics pay more per site under enterprise contracts, about $6,225 a year instead of $3,600. Re-pricing them closes the gap exactly:

32,000 independent clinics × $3,600 = $115.2M
8,000 group-owned clinics × $6,225 = $49.8M
Total = $165.0M, the top-down figure. The difference is 8,000 × ($6,225 − $3,600) = 8,000 × $2,625 = $21.0M.

So both numbers are right, and they answer different questions: $165M is what the region spends today, and $144M is what PawLedger could earn at its own price. Present $144M as the TAM and footnote the $165M.

Bridge between two estimates for the fictional PawLedger example: bottom-up TAM of 40,000 clinics times $3,600 equals $144.0M; top-down TAM of $1.1B regional clinic software spend times 15% practice-management share equals $165.0M; the $21.0M gap is 14.6% of bottom-up, inside the 20% rule, and is explained by 8,000 group-owned clinics paying $2,625 more per site. — Do not average two estimates; find the segment that explains the gap and say it on the slide.

What to fix when the gap is larger than 20%

Symptom	Likely cause	What to fix
Top-down far larger	The report's category is wider than your product (it includes hardware, services or adjacent software)	Find the report's definition and remove the parts your product does not replace
Top-down far larger	Large customers pay much more than your list price	Split the count by size and price each segment, as in the PawLedger example
Bottom-up far larger	Your count includes customers who do not buy software at all, or your price is above what the market pays	Check adoption (how many already pay for any solution) and compare your price with competitors' public prices
Either way	Different years, currencies or regions	Restate both in the same year, currency and geography before comparing

The market-size ledger: a template for every number

The market-size ledger is a one-page table with one row per layer: the definition you used, the formula with its inputs, the source and year of each input, and the result. It is the document behind the slide; if a reviewer asks where a number came from, the answer is one row of the ledger.

Copy the blank version into a document or spreadsheet, and fill one row at a time:

Layer	Definition used	Formula and inputs	Source and year	Result
TAM	Every [customer type] in [region] that needs [job the product does]	[count] × [annual revenue per customer]	Count: [register, year]. Price: [price list or contracts, year]	$[ ] a year
SAM	TAM customers that today's product, channels and geography can serve	[count after filters] × [same price]; list each filter	Each filter: [source or internal data, year]	$[ ] a year
SOM	The share of SAM you can win in [3] years	min([share] × [SAM count], [reps × deals a month × months]) × [price]	Share: [comparable or pipeline data]. Capacity: [sales plan]	$[ ] ARR in year [3]
Top-down	The same TAM, from published spend	[industry total] × [filter %] × [filter %]	[report, publisher, year, page]	$[ ]; gap [ ]%
Value	Annual value created per customer	[hours or money saved] × [rate]	[customer interviews, pilot data, year]	Price = [ ]% of value

And here is the ledger filled for PawLedger:

Layer	Definition used	Formula and inputs	Source and year	Result
TAM	Every veterinary clinic in the sales region	40,000 clinics × $3,600	Count: clinic register (fictional), 2026. Price: PawLedger list price, 2026	$144.0M a year
SAM	Independent clinics with 3+ vets in countries PawLedger supports	40,000 → 32,000 → 15,000 → 12,000 clinics × $3,600	Ownership and size: register, 2026. Countries: product coverage, 2026	$43.2M a year
SOM	Clinics won in 3 years	min(4% × 12,000 = 480; 2 × 7 × 36 = 504) × $3,600	Sales plan and pilot close rates, 2026	$1.73M ARR, year 3
Top-down	Regional practice-management spend	$1.1B × 15%	Industry report (fictional), 2026	$165.0M; gap 14.6%
Value	Staff time saved per clinic	6 h × $25 × 52 weeks = $7,800	Pilot time study (fictional), 2026	Price = 46% of value

A TAM SAM SOM calculator in eleven spreadsheet cells

If you searched for a TAM SAM SOM calculator, you need only these cells. Put the inputs in column B and the formulas below them; change any input and every layer updates.

Cell	Label	Input or formula	PawLedger
B2	Potential customers	Input (count)	40,000
B3	Annual revenue per customer	Input (price × 12 for monthly plans)	$3,600
B4	TAM	=B2*B3	$144,000,000
B5	Serviceable customers	Input (count after filters)	12,000
B6	SAM	=B5*B3	$43,200,000
B7	Target share of SAM	Input (%)	4%
B8	Sales capacity (customers)	Input (reps × deals a month × months)	504
B9	SOM customers	=MIN(B5*B7,B8)	480
B10	SOM	=B9*B3	$1,728,000
B11	Top-down TAM	Input (industry total × filter %)	$165,000,000
B12	Gap vs bottom-up	=(B11-B4)/B4	14.6%

How to present market size: the 1-slide and 3-slide versions

A market size slide needs four things: a title that states the finding, the three layers as rings or bars with their values, the formula under each value, and a dated source line. Use one slide in a pitch deck and three slides in a strategy or consulting deck, where the build and the cross-check get their own pages.

The 1-slide version (pitch deck)

Zone	What goes there	PawLedger
Title	The finding in one sentence, with the SOM and the period	"PawLedger can reach $1.7M ARR in three years inside a $43M serviceable market"
Visual	Three nested rings or three bars, each labelled with layer, value and customer count	TAM $144.0M · 40,000 clinics; SAM $43.2M · 12,000; SOM $1.73M · 480
Formula strip	One line under each value: count × price	40,000 × $3,600; 12,000 × $3,600; 480 × $3,600
Check line	The cross-check in a few words	"Top-down: $1.1B × 15% = $165M (+14.6%, enterprise pricing)"
Source line	Publisher, title and year of every external input	"Sources: [clinic register], 2026; [industry report], 2026; PawLedger pricing and sales plan, 2026"

Two design notes. First, nested circles are almost never drawn to scale, and that is fine as long as the numbers are printed: drawn by area, PawLedger's SAM ring would have 55% of the TAM's radius (the square root of 30%) and the SOM ring only 11% (the square root of 1.2%), too small to label. If you want proportion to show, use three horizontal bars instead. Second, a market slide is one of the few places where a formula belongs on the slide itself, not in an appendix: the formula is the evidence. For more on charts and labels, see our guide to presenting data in a presentation.

The 3-slide version (strategy and consulting decks)

The answer. Rings or bars with the three values and the finding as the title, exactly as in the 1-slide version.
The build. The bottom-up logic as a driver tree or the filter table: 40,000 → 32,000 → 15,000 → 12,000 clinics, each step with its reason, then the SOM with the capacity and pipeline checks.
The cross-check. Top-down beside bottom-up, the gap in percent and the segment that explains it, plus the value-based price check.

Each title is a full-sentence finding ("Top-down and bottom-up agree within 15% once enterprise pricing is separated"), the style our guide to consulting-style slides teaches. In a pitch deck, the market slide usually sits after the solution and before the business model; the outline that Sequoia publishes for founders lists "Market potential" right after "Why now?" (Sequoia Capital, Writing a business plan). Our review of AI pitch deck generators covers the rest of the deck.

Here are two slides from this article's worked example, as NOXI built them, unedited.

NOXI slide: 'PawLedger can reach $1.73M ARR in three years inside a $43.2M serviceable market', nested rings for TAM $144.0M, SAM $43.2M and SOM $1.73M with the formula under each, plus a top-down cross-check of $1.1B × 15% = $165.0M, 14.6% above bottom-up. — The one-slide version: rings with values, a formula under each figure and the top-down check beside them.

NOXI slide: 'Three filters narrow 40,000 clinics to 12,000 that PawLedger can serve today', a table from all clinics to independent, three or more vets and countries served, with the count and share kept at each step, ending at 12,000 × $3,600 = $43,200,000 a year. — Every filter between TAM and SAM is named, with the count it leaves.

Sourcing rules: which numbers to trust and how to cite them

Every external number on a market slide needs a publisher, a title and a year, written on the slide in a source line. Prefer registers and censuses for counts, your own price list and contracts for price, and named reports with a stated methodology for top-down totals.

Input	Strongest source	Acceptable	Avoid
Customer count	National business census, licensing register, official statistics	Trade association membership data, a paid database with its method stated	A blog post repeating a number with no origin
Price	Your signed contracts and price list	Pilot pricing, competitors' public price pages (dated)	"Customers told us they would pay" without a test
Industry total	A named report with its scope and method, or segment revenue in public filings	A press release quoting a report you could not open (flag it)	An undated figure from a press release or a listicle
Filters and shares	Your own data: pilot conversion, win rates, coverage	Survey data with sample size and date	Round percentages with no stated reason

Four habits keep the slide defensible:

Date-stamp everything. Write the data year of each input, not just the publication year. A report published in 2026 may describe 2024 spend.
Grow old figures openly. If you must use a 2023 total in 2026, show the growth assumption: "$1.0B (2023) × 1.033³ ≈ $1.10B (2026), assuming 3.3% a year".
Use one source line format. "Source: Publisher, Title (Year); company analysis." Put "company analysis" after any number you derived, so readers know which figures are yours.
Keep the ledger. The slide shows the result; the ledger shows the path. Send it with the deck when an investor asks for backup.

If an AI tool researches the numbers for you, the same rules apply: check that every figure has a source you can open, and that the year on the slide is the year of the data. Our guide to AI presentations with research and citations covers that checking routine.

Red flags investors call out, and how to fix each

Investors rarely object to a large market. They object to a market number they cannot trace, a SAM that equals the TAM, and a SOM nobody could sell. Each red flag below has a specific fix.

Red flag	Why it hurts	Fix
"1% of a huge market"	A share of an industry total says nothing about who buys or why	Present the bottom-up count × price; keep the industry total as the check
SAM equals TAM	It implies the product can serve every customer everywhere today	Name each filter (segment, size, geography, channel) with its number
SOM with no capacity check	The share may need more sales than the team can make	Show reps × deals per month × months, and the pipeline it needs
Stale or unnamed report	A figure without publisher and year cannot be checked	Cite publisher, title and data year; grow old figures openly
Mixed units	Gross transaction value, one-time sales and annual revenue are not comparable	State every layer as annual revenue to you, in one currency and year
Wrong category	Counting all "healthcare IT" for a scheduling tool	Take only the spend your product replaces, using the report's own definition
A TAM that ignores new demand	A product that changes price or convenience can grow the market beyond today's spend	Size today's market first, then show expansion as a separate, evidenced scenario

The last row is the famous exception. In June 2014, finance professor Aswath Damodaran valued Uber using the global taxi and limousine market, about $100 billion, as its market, with Uber reaching a 10% share (Aswath Damodaran, A Disruptive Cab Ride to Riches: The Uber Payoff). Bill Gurley, an Uber investor and board member, replied that this assumed "the future will look quite like the past", and argued that cheaper, faster and more reliable rides would create demand that the taxi market never had (Bill Gurley, How to Miss By a Mile). The lesson for a slide is not "make the TAM bigger". It is to present today's market as the base case and market expansion as a separate scenario with its own evidence, so a sceptical reader can accept one without the other.

Four red flags on market size slides paired with their fixes: 1% of a huge market becomes customers counted times price; SAM equal to TAM becomes each filter named with its number; SOM with no capacity check becomes reps times deals a month times months; an unnamed report becomes publisher, title and data year on the slide. — Each red flag is a missing trace; the fix puts the input, its formula or its source on the slide.

For how to show the uncertainty in a forecast without false precision, for example a SOM range rather than one figure, see our guide to presenting forecast uncertainty.

TAM by business model: what to count and what to multiply

The formula is always customers × annual revenue per customer, but the unit you count changes with the business model: accounts for B2B software, users or households for consumer subscriptions, transactions for marketplaces and projects for services.

Model	Count	Multiply by	Watch out for
B2B SaaS	Accounts (companies, sites or teams)	Annual contract value, or seats × price per seat	Seat counts per account vary hugely by company size; segment by size class
Consumer subscription	Users or households in the target group	Monthly price × 12	Counting all adults when only a segment has the need or the device
Consumer product	Buyers in the target group	Price ÷ replacement cycle in years	Treating a three-year purchase as yearly revenue
Marketplace	Transactions a year	Average order value × take rate	Presenting gross transaction value as your TAM; state both, label which is revenue
Services	Client organisations	Projects a year × average fee	Ignoring delivery capacity, which caps a services SOM sooner than sales capacity
Usage-based	Accounts	Units used a year × price per unit	Using peak rather than typical usage

A marketplace example shows why the label matters: 2,000,000 bookings a year × $80 average order = $160M of gross bookings, but at a 12% take rate the revenue TAM is $19.2M. Both numbers can appear on the slide; only the second is comparable with a software company's TAM. For the sales side of B2B sizing, our sales deck guide shows how the same account counts feed a territory plan.

What is a good SOM percentage?

There is no standard SOM percentage. A good SOM is one you can derive: a share of SAM that your sales capacity, pipeline and comparable companies' growth make plausible over the stated period, usually three years. Present the derivation, not the percentage.

The University of Regina's template offers one derivation for companies with revenue: this year's SOM = last year's market share × this year's SAM, where last year's share is last year's revenue divided by last year's SAM (University of Regina). For a pre-revenue company, the capacity method in the PawLedger example works better: the SOM is whichever is smaller, the share you aim for or what your team can sell. In the example, 4% of SAM is 1.2% of TAM, and both percentages are consequences of the inputs, not targets picked first.

Two things make a SOM more credible than any percentage: a named period ("ARR at the end of year three") and a link to the plan. If the SOM on the market slide does not match the revenue line in your financial plan for the same year, a reviewer will notice. Our investor update template shows how the same numbers are then tracked quarter by quarter, and the business case guide covers sensitivity when an internal committee is the audience.

3 AI prompts for a market size slide

Use them in NOXI or in any AI tool. Replace the brackets, and check every number against your ledger before the deck leaves your hands.

Prompt 1 · Researched market size from a prompt

Create a [3]-slide market sizing section for [company], which sells [product] to [customer type] in [region] at [annual price]. Research the number of [customer type] in [region] and the published spend on [category], with publisher and data year for each figure. Slide 1: TAM, SAM and SOM as nested rings with value, customer count and the formula count × price under each. Slide 2: the bottom-up build with each SAM filter [filters] and its reason. Slide 3: top-down total × filters beside bottom-up, with the gap in percent. Put a source line on every slide with figures. Invent no numbers; mark missing inputs for review.

Prompt 2 · From your own ledger

Build a market size slide from the attached [market-size ledger]. Use every number exactly as written: TAM [$144.0M = 40,000 × $3,600], SAM [$43.2M = 12,000 × $3,600], SOM [$1.73M ARR = 480 × $3,600 in 3 years]. Title it as a finding with the SOM and the period. Show three rings labelled with layer, value and customer count, a formula strip under each, a check line [top-down $1.1B × 15% = $165M, +14.6%] and the source line [sources and years].

Prompt 3 · Add the cross-check and capacity slide

After the market size slide, add one slide titled with the cross-check finding. Left: bottom-up [40,000 × $3,600 = $144.0M] and top-down [$1.1B × 15% = $165.0M] as two bars, with the gap [$21.0M, 14.6%] and its cause [8,000 group-owned clinics × $2,625 more per site]. Right: the SOM capacity check [2 reps × 7 clinics a month × 36 months = 504 ≥ 480 needed] and the pipeline it implies [2,400 opportunities at a 20% win rate]. Keep all numbers unchanged.

How to build the market size slides in NOXI

NOXI can research the market from a prompt or build the slides from your own ledger, in the style of your own template. It is free, with no card and no watermark; uploading files needs a free account, and a full deck uses about 25 of the 1,000 monthly credits.

Step 1: Choose the starting point

If you have no figures yet, start from Prompt 1: when you start from a prompt, NOXI researches the topic on the web first, and slides with figures carry a source line linking to where each number came from. If you already have a ledger, attach it as a spreadsheet, Word document or PDF and use Prompt 2.

Step 2: Match your deck's style

Choose Match reference and attach your pitch deck or company template as PPTX or PDF, or a screenshot of one slide. NOXI designs the new slides in that style, so the market section fits into the deck you already have.

Step 3: Review the outline first

Choose Plan mode to review the outline before generation. Check that each title states a finding, that the three layers carry the same price, and that the SOM names its period, then generate and watch each slide being built.

Step 4: Check every number against the ledger

Open each researched source from its source line and compare the figure and year with your ledger. Edit text on the slide, edit table cells and chart numbers in NOXI, or ask the AI in plain English or Arabic to replace a figure and keep the formula strip in step.

Step 5: Add the cross-check slide

Use Prompt 3 to add the top-down versus bottom-up slide. Click any element and tell the AI what to change; on desktop, sketch on the slide, for example an arrow from the gap to its cause, and the AI follows your drawing.

Step 6: Share, export and present

Invite a co-founder or adviser by email to edit together in real time, or share a view-only link. Download an editable PowerPoint (.pptx) with real text boxes and embedded fonts, or a PDF for the data room, free and with no watermark, or present full-screen from NOXI.

Frequently asked questions

What is TAM SAM SOM?: TAM SAM SOM is a three-layer way to size a market. TAM, the total addressable market, is the annual revenue if every potential customer bought your product. SAM, the serviceable available market, is the part your current product, channels and geography can serve. SOM, the serviceable obtainable market, is the part of SAM you can realistically win in a stated period, usually three years.
How do you calculate TAM, SAM and SOM?: Multiply a count of customers by the annual revenue per customer at each layer. TAM uses every potential customer, SAM the customers left after filters for segment, size and geography, and SOM the customers you can win in the period. In the fictional PawLedger example: 40,000 × $3,600 = $144.0M, 12,000 × $3,600 = $43.2M and 480 × $3,600 = $1.73M.
How do you calculate SOM?: Take a target share of SAM for a stated period, convert it to customers, then cap it at your sales capacity: reps × deals per rep per month × months. Multiply the smaller number by the annual price. For PawLedger, 4% of 12,000 clinics is 480, capacity is 2 × 7 × 36 = 504, so the SOM is 480 × $3,600 = $1.73M ARR in year three.
What is a good SOM percentage?: There is no standard percentage. A good SOM is one you can derive from sales capacity, pipeline and the growth of comparable companies, stated for a named period. Investors trust a SOM that matches the revenue line in the financial plan for the same year far more than a round percentage of SAM chosen in advance.
What is the difference between top-down and bottom-up market sizing?: Bottom-up counts the potential customers and multiplies by the annual revenue per customer. Top-down starts from a published industry total and applies percentage filters for product, region and segment. Present the bottom-up number, use top-down as the cross-check, and explain any gap larger than about 20% before the slide goes out.
Is TAM the same as market size?: Not exactly. Market size in an industry report usually means what customers spend today across all vendors and prices. TAM is what your product could earn at your price if every potential customer bought it. They match when your price is close to the market average, and differ when you sell a cheaper or premium product.
How do you show market size in a pitch deck?: Use one slide with a finding as the title, the three layers as nested rings or bars with values and customer counts, a formula under each value (customers × price), one line with the top-down check, and a source line with publisher and year. Place it after the solution slide and keep the full ledger ready as backup.
Should the TAM SAM SOM circles be drawn to scale?: Usually not, and it does not matter if the values are printed on each ring. Drawn to scale by area, a SAM of 30% of TAM has 55% of its radius and a SOM of 1.2% only 11%, too small to label. If you want proportions to be visible, use three horizontal bars instead of circles.

Sources & methodology

How this guide was made: it combines the standard definitions of TAM, SAM and SOM with the bottom-up and top-down methods taught by accelerators and university venture programmes, and adds practitioner method for the slide. The 20% cross-check threshold, the ledger and the slide layouts are editorial recommendations, not a standard. PawLedger and all its figures, including the clinic counts and the industry report, are fictional; every calculation was checked in a spreadsheet. All sources were checked on 13 October 2026.

[1] Definitions of TAM (revenue at 100% market share with no competition), SAM and SOM — TechTarget, TAM SAM SOM (published 17 January 2023).
[2] TAM = number of accounts × annual contract value; SAM as the serviceable segment; SOM from last year's market share × this year's SAM — University of Regina, How to calculate market size (template).
[3] The opportunity slide is usually expressed as a TAM; concrete bottom-up sizing preferred over top-down — Geoff Ralston, Y Combinator, A Guide to Demo Day Presentations (25 July 2016).
[4] "Market potential" as a section of the pitch outline, after "Why now?" — Sequoia Capital, Writing a business plan.
[5] Establishment counts by industry and employment size for the United States (latest data year 2023) — US Census Bureau, County Business Patterns.
[6] Enterprise statistics by economic activity and size class for the European Union — Eurostat, Structural business statistics.
[7] Uber valued on a global taxi and limousine market of about $100 billion with a 10% share — Aswath Damodaran, A Disruptive Cab Ride to Riches: The Uber Payoff (9 June 2014).
[8] The reply arguing that the estimate assumed the future would look like the past and ignored market expansion — Bill Gurley, How to Miss By a Mile: An Alternative Look at Uber's Potential Market Size (11 July 2014).

Build your market size slides in NOXI, free: start from a prompt and get researched figures with a source line, or attach your own ledger, match your deck's style, and export an editable PowerPoint or PDF.