#WBIGTM Episode 2: TAM, SAM & SOM Explained

Identifying your market: TAM, SAM and SOM demystefied

In this episode of What's Broken in GTM and How To Fix It, Simon and I start by chatting about whether SaaS is facing an inflection point with the rise of alternative software models, buyer fatigue, and challenges to start-up funding. Then, we pick-up on a point raised last week regarding TAM, SAM and SOM and drill into why these acronyms are crucial to really understanding market opportunity.

Here’s the TL;DL ( “too long, didn’t listen”) in case you don’t have time for the whole episode: Understanding the differences between TAM and SAM and SOM is crucial for companies to assess their market potential, set realistic expectations with investors, and make properly informed strategic decisions.

Listen on as we breakout the definitions for TAM (total addressable market), SAM (serviceable available market) and SOM (serviceable obtainable market), the relationship with ICP (ideal customer profile) and indeed product-market fit that we discussed last week. Properly understanding the market opportunity sets realistic expectations with leadership, boards and investors while enabling effective go-to-market strategy aligned with company goals.

Go-to-market leaders must also ensure they have credible data to back up their market sizing before approaching investors and keep in mind that, sometimes, the biggest competitor is customer apathy or the decision to do nothing.