Most Founders Mess Up TAM, SAM, and SOM. Here's How to Get It Right.

If you’ve ever built a startup pitch deck, you’ve probably stressed over the TAM slide. You know the one - big market number, a hockey stick, and a hope that investors don’t dig too deep.

The problem is, most founders treat TAM, SAM, and SOM like wild guesses. But done right, these numbers can actually prove you understand your customer, your sales strategy, and your business model.

Here’s a simple way to approach it like an operator, not a dreamer.

Start with TAM — Total Addressable Market. This is the full universe of potential customers multiplied by what each one would spend annually. For example, if there are 12 million small retailers in the US, and each could spend $200 per month on payments, your TAM is $28.8 billion. It's the big picture, but investors know you won’t capture all of it.

Next, drill into your SAM — Serviceable Available Market. This is the segment you can actually target based on geography, behaviour, or gaps in the competition. If only 3 million of those retailers are in Tier 2 and Tier 3 cities underserved by Stripe or PayPal, then your SAM is $7.2 billion. It’s still big, but more focused.

Finally, define your SOM — Serviceable Obtainable Market. This is where most pitches fall apart. SOM is not wishful thinking; it’s a realistic projection of how many customers you can acquire in 3 to 5 years, multiplied by their annual spend. If you expect to onboard 50,000 retailers at $150 per year, your SOM is $7.5 million.

These numbers are only credible if they’re backed by real GTM math — sales capacity, marketing budget, and adoption timelines. Otherwise, you're pitching a fantasy.

Investors don’t expect you to conquer the world overnight. They want to know you understand the world you’re actually operating in.

So the next time you pitch, don’t just throw up big numbers. Show your work. That’s what earns trust.

If your TAM slide still feels like guesswork, maybe it’s time to dig deeper. The clarity will pay off.