# TAM / SAM / SOM

#concept #strategy #positioning

## Summary

The standard market-sizing frame — three nested circles from "everyone who could conceivably buy" down to "who you can win now." In the vault it matters for one directional rule: **investors reward the outer circle, execution starts from the inner one** ([[2026-07-26-how-to-build-a-billion-dollar-company-2027]], [[oskar-hartmann]]: SOM > TAM at the start). It is the venture-vocabulary form of the vault's oldest rule, [[niche-selection]]'s "niche is upstream of everything."

## Current Understanding

**The three circles:**

| Term | Expands to | Means | Example (from the source's own case) |
|---|---|---|---|
| **TAM** | Total Addressable Market | Everyone in the world who could conceivably buy a product like yours | "AI agents for every profession" |
| **SAM** | Serviceable Available Market | The slice your actual product and channels could reach | US home-services businesses |
| **SOM** | Serviceable Obtainable Market | The slice you can realistically **win now**, given who you are today | "AI agent answering calls for HVAC/plumbers/roofers" |

**The directional rule — SOM > TAM at the start.** Pitch decks lead with TAM because venture math needs outlier room ([[venture-fit]]); but the start must be a small market where you can take a meaningful share *immediately*. Hartmann's formula: **big market + small winnable sub-market + MVP, not a fantasy product.** His exemplar: Manifest (Дэн Мишин) became a unicorn starting from **immigration law alone**, not "AI lawyer"; Fab.com's healthy peak was $100M on design home goods for a loyal base — it died reaching for the outer circle ([[venture-fit]]).

**The beachhead reading.** The TAM doesn't disappear — it stays *behind* the SOM as the growth story. This is the nuance the frame adds over the services sources' niche rule: a niche is not (necessarily) a destination, it's the winnable entry point to a larger market. Compare [[niche-selection]]'s "Shopify dev for fashion brands beats web developer" — same move, stated without the outer circles.

**Terminology note:** the ingested source uses only TAM and SOM; **SAM is standard industry vocabulary supplied for completeness** (from general knowledge, not from any ingested source). Definitions of the boundaries vary across the industry — some define SOM as a near-term revenue forecast rather than a segment — so treat the circles as a thinking frame, not a measurement standard.

## Evidence

- "Investors love a big TAM, but start from a SOM — a small market where you can take a significant share *now*"; HVAC-agent vs all-professions; Manifest immigration-law unicorn; big-market + winnable-sub-market + MVP formula — [[2026-07-26-how-to-build-a-billion-dollar-company-2027]] ([[oskar-hartmann]])
- The same rule without the vocabulary, from two other traditions: "niche is upstream of everything" (Tony), "80% is WHO not WHAT" (Rodenko), "Shopify dev for fashion brands" (AB Analytics) — [[niche-selection]]
- SAM definition and boundary caveats — general knowledge, **no ingested source** (recorded 2026-07-26 from a Q&A session)

## Related Pages

- [[niche-selection]] — the vault's canonical page for *choosing* the inner circle; this page supplies the sizing vocabulary
- [[venture-fit]] — why decks lead with TAM, and what chasing it prematurely did to Fab.com
- [[sales-channel-as-moat]] — the SOM is where a repeatable channel gets proven before it scales outward
- [[oskar-hartmann]] — the voice that brought the frame into the vault
- [[overview]]

## Contradictions / Uncertainty

- **SAM is unsourced within the vault** — standard industry usage, added for completeness and marked as such. If a future ingested source defines the circles differently, that source wins and this page records the conflict.
- The frame assumes the beachhead-to-bigger-market path is real; [[niche-selection]] notes some niches are chosen precisely for durable narrowness (AI-weak methodologies). A SOM picked as a *beachhead* and a niche picked as a *fortress* are different strategies wearing the same circle — no source distinguishes them.
- Sizing numbers attached to these terms in pitch practice are notoriously constructed top-down; nothing in the vault yet covers *how to size* any circle honestly.

## Next Questions

- For [[eugene]]: what is his SOM in one sentence — and is his narrow segment (industrial-equipment CV/embedded) a beachhead to a larger market or a fortress niche?
- Is there an honest bottom-up sizing method (customer count × realistic price from [[pricing-from-value]]) worth adding when a source supplies one?
