| name | market-sizing |
| description | Use when the user asks to "calculate market size", "TAM SAM SOM analysis", "estimate market opportunity", "market sizing", "total addressable market", "serviceable market", "market potential", or needs market-size estimation methodologies, opportunity calculations, or growth projections. |
| version | 0.4.2 |
Market Sizing (TAM/SAM/SOM)
Quantify the revenue opportunity in a market. The TAM/SAM/SOM framework refines from total market to realistically achievable share.
Required Frameworks
| Framework | Output Section | Required |
|---|
| Methodology Selection | Methodology | yes |
| TAM/SAM/SOM Hierarchy | Market Sizing Summary | yes |
| Scenario Modeling | Scenarios | yes |
| Growth Projections (CAGR + INC/DEC/CONST) | Market Sizing Summary | yes |
Key Definitions
- TAM — total global demand; assumes 100% share (theoretical ceiling).
- SAM — portion of TAM targetable with the current business model (geographic/segment constraints).
- SOM — realistic share achievable near-term (1-3 years) given competition, resources, and go-to-market.
Methodology Selection
| User Signal | Methodology |
|---|
| "TAM SAM SOM", no pricing data | Top-Down |
| Provides pricing / unit / customer data | Bottom-Up |
| "value", "pain point cost", "willingness to pay" | Value Theory |
| "growth trends", "CAGR" | Top-Down + Trend Analysis |
| "bear/base/bull", "scenarios" | Any + Scenario Modeling |
| Vague, no segment | Top-Down (state assumptions) |
| Known declining market | Top-Down + DEC handling |
Calculation Methodologies
Top-Down — start with industry market size from analyst reports, apply the target-segment percentage, adjust for geography, factor growth. Example: Global SaaS $200B → HR SaaS 15% = $30B → North America 40% = $12B (SAM) → 2% achievable = $240M (SOM). Fast but source-dependent.
Bottom-Up — build from unit economics; use the user's pricing figure when given. Identify addressable customer count, price per customer, then total revenue (show the multiplication). Example: 50,000 SMBs × $5,000 = $250M (SOM); 500,000 SMBs = $2.5B (SAM); +enterprise = $10B (TAM). More defensible, slower.
Value Theory — size by value delivered. Compute the customer pain-point cost (use the user's figure, e.g., "$4.5M per breach"), estimate the fraction the solution addresses, apply a capture rate (typically 10-30%, stated explicitly), then still produce full TAM/SAM/SOM. Example: $100K/yr problem × 20% capture × 100,000 customers = $2B.
Trend Indicators (INC / CONST / DEC)
Always include a Trend column. Document evidence for each:
- INC — growing >10%/yr ("Analyst projects 25% CAGR through 2027").
- CONST — 0-10%/yr ("Mature market, 3% annual growth").
- DEC — contracting; show negative rate ("displaced legacy tech; revenue -12% YoY").
When the user asks about growth/CAGR specifically, add a sub-trend table breaking growth down by segment.
Data Sources
- Primary — analyst reports (Gartner, Forrester, IDC), government statistics (Census, BLS), trade associations, public-company financials.
- Secondary — research firms (Statista, IBISWorld), news citing research, industry publications.
- Estimation (use carefully) — job counts × salary, search-volume proxies, downloads × price, traffic estimates.
Critical Output Requirements
Every output MUST include all of:
- A "Market Sizing Summary" table with TAM, SAM, SOM rows.
- Concrete dollar values (
$18.5B, $240M) — NEVER placeholders ($X.XB, $XXM, [insert]).
- An explicit methodology name (Top-Down / Bottom-Up / Value Theory / Hybrid).
- A "Key Assumptions" section with ≥2 numbered, specific assumptions.
- A "Data Sources" section naming ≥1 source.
- A "Confidence Level" section (High/Medium/Low + explanation).
- TAM > SAM > SOM ordering.
Render the TAM/SAM/SOM sizing figure as Mermaid — a flowchart for nested scope or a
pie for share. Any figure, chart, or diagram is rendered as a fenced Mermaid code
block (a mermaid info-string fence), never ASCII art, an image link, or Graphviz/DOT;
a required figure is never silently omitted — if the data cannot support it, say so in
prose. Plain tabular matter stays a Markdown table.
Output Structure
## Market Sizing Summary
| Metric | Value | Growth | Trend |
|--------|-------|--------|-------|
| TAM | $18.5B | 15% CAGR | INC |
| SAM | $4.6B | 14% CAGR | INC |
| SOM | $92M | - | - |
## Methodology [named]
## TAM Calculation [step-by-step, cited, concrete]
## SAM Derivation [narrowing % from TAM]
## SOM Justification [share rationale]
## Key Assumptions [≥2 numbered]
## Data Sources [≥1 named]
## Confidence Level [High/Medium/Low + why]
Scenario Modeling
When scenarios are requested, satisfy Bear < Base < Bull for every metric, each with a driver rationale. Never use placeholder values in scenario tables.
| Scenario | TAM | SAM | SOM |
|---|
| Bear | $5B | $500M | $10M |
| Base | $8B | $800M | $25M |
| Bull | $12B | $1.2B | $50M |
Validation
Before finalizing: TAM > SAM > SOM holds; no placeholders ($X, [insert, $XXM, TBD); any user-provided price/cost appears verbatim; a requested methodology is named; every trend indicator has a supporting data point.
Handling Vague & Declining Markets
- Vague ("market size for drones") — state scope assumptions explicitly, name major segments, still produce full TAM/SAM/SOM, ask clarifying questions, never return a single number.
- Declining — use DEC with negative rates (
-12.5% CAGR), add a year-over-year decline table, note entry/operating risks, still provide complete TAM/SAM/SOM, cite sources.
Confidence Tiers
High = top-down and bottom-up converge within 20%. Medium = single methodology with 2+ supporting points. Low = single data point or methodology gaps. Cross-reference financial (revenue validates potential) and competitive (player count and share). Flag conflicts where summed competitor revenue exceeds total market size.
