- name
- market-sizing-analysis
- description
- Calculate TAM/SAM/SOM for market opportunities using top-down, bottom-up, and value theory methodologies. Use this skill when sizing markets, estimating addressable revenue, validating market opportunity for a new venture, or building investor-ready market analysis for a startup pitch or business plan.
- version
- 1.0.0
# Market Sizing Analysis
Comprehensive market sizing methodologies for calculating Total Addressable Market (TAM), Serviceable Available Market (SAM), and Serviceable Obtainable Market (SOM) for startup opportunities.
## Overview
Market sizing provides the foundation for startup strategy, fundraising, and business planning. Calculate market opportunity using three complementary methodologies: top-down (industry reports), bottom-up (customer segment calculations), and value theory (willingness to pay).
## Core Concepts
### The Three-Tier Market Framework
**TAM (Total Addressable Market)**
- Total revenue opportunity if achieving 100% market share
- Defines the universe of potential customers
- Used for long-term vision and market validation
- Example: All email marketing software revenue globally
**SAM (Serviceable Available Market)**
- Portion of TAM targetable with current product/service
- Accounts for geographic, segment, or capability constraints
- Represents realistic addressable opportunity
- Example: AI-powered email marketing for e-commerce in North America
**SOM (Serviceable Obtainable Market)**
- Realistic market share achievable in 3-5 years
- Accounts for competition, resources, and market dynamics
- Used for financial projections and fundraising
- Example: 2-5% of SAM based on competitive landscape
### When to Use Each Methodology
**Top-Down Analysis**
- Use when established market research exists
- Best for mature, well-defined markets
- Validates market existence and growth
- Starts with industry reports and narrows down
**Bottom-Up Analysis**
- Use when targeting specific customer segments
- Best for new or niche markets
- Most credible for investors
- Builds from customer data and pricing
**Value Theory**
- Use when creating new market categories
- Best for disruptive innovations
- Estimates based on value creation
- Calculates willingness to pay for problem solution
## Detailed patterns and worked examples
Detailed pattern documentation lives in `references/details.md`. Read that file when the navigation tier above is insufficient.
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