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)

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?

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