Bottom up, from company records, with every filter stored.
Most market sizing starts with a market report and works down. That produces a number nobody can defend, because the first filter was chosen by someone outside your company.
Start instead with your closed won list. Pull the firmographics of every company that actually bought: industry, headcount, revenue band, geography, and the tech they were running. That set is your evidence.
Total addressable market is every company that could buy, defined by the filters you just derived. Name each one and store it. Industry codes, headcount range, revenue band, region.
The test is whether someone who was not in the room can rebuild the number from the filter list alone. If they cannot, it is an estimate wearing a suit.
Serviceable addressable market is TAM narrowed by what you can genuinely reach today. Segments you have a motion for, geographies you can support, integrations you actually have, deal sizes your pricing fits.
Skipping it is why TAM and SOM usually look unrelated. SAM is the sentence that connects them, and it is the one a board member will ask about.
Serviceable obtainable market is what this team can take this year. It is SAM multiplied by your real win rate by segment, constrained by how many accounts the team can actually work and how long a deal takes.
If you chose the number first and built the model to reach it, everyone in the room knows. Derive it instead and the conversation changes.
The step that makes it real: stamp each opportunity with the segment and zone it was predicted under. A year later you can roll the whole thing up and say how far off you were.
On one engagement the SOM was $3M and the actual came in at $5.5M, and we could say exactly which zones produced the difference. A TAM nobody checks is just a slide.
TAM is every company that could buy. SAM is the subset you can actually reach today, given your motion, geography, integrations and pricing. SOM is what this team can realistically take this year at your actual win rate.
Bottom up from company level records rather than top down from a market report. Derive the firmographic filters from who you have already closed, apply them to a company database, and store every filter so the number can be rebuilt.
Because nobody can say which filters produced it. If the method is not written down, the number is an opinion. Store the filters and the challenge becomes a conversation about assumptions instead.
No. That is a target, not an analysis. SOM should come out of win rate by segment, coverage capacity and cycle length. If it happens to land near last year plus growth, you now have a reason.
Once a year as part of planning, and whenever a core assumption changes: new segment, new geography, new pricing. If the filters are stored properly the rebuild takes hours, not weeks.
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