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Skill
market-sizing-analysis
Original text · EnglishCalculate TAM/SAM/SOM for market opportunities using top-down, bottom-up, and value theory methodologies. Use this skill when sizing markets, estimating addressable revenue, validating market opportunity for a new venture, or building investor-ready market analysis for a startup pitch or business plan.
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name: market-sizing-analysis
description: Calculate TAM/SAM/SOM for market opportunities using top-down, bottom-up, and value theory methodologies. Use this skill when sizing markets, estimating addressable revenue, validating market opportunity for a new venture, or building investor-ready market analysis for a startup pitch or business plan.
version: 1.0.0
Market Sizing Analysis
Comprehensive market sizing methodologies for calculating Total Addressable Market (TAM), Serviceable Available Market (SAM), and Serviceable Obtainable Market (SOM) for startup opportunities.
Overview
Market sizing provides the foundation for startup strategy, fundraising, and business planning. Calculate market opportunity using three complementary methodologies: top-down (industry reports), bottom-up (customer segment calculations), and value theory (willingness to pay).
Core Concepts
The Three-Tier Market Framework
TAM (Total Addressable Market)
Total revenue opportunity if achieving 100% market share
Defines the universe of potential customers
Used for long-term vision and market validation
Example: All email marketing software revenue globally
SAM (Serviceable Available Market)
Portion of TAM targetable with current product/service
Accounts for geographic, segment, or capability constraints
Represents realistic addressable opportunity
Example: AI-powered email marketing for e-commerce in North America
SOM (Serviceable Obtainable Market)
Realistic market share achievable in 3-5 years
Accounts for competition, resources, and market dynamics
Used for financial projections and fundraising
Example: 2-5% of SAM based on competitive landscape
When to Use Each Methodology
Top-Down Analysis
Use when established market research exists
Best for mature, well-defined markets
Validates market existence and growth
Starts with industry reports and narrows down
Bottom-Up Analysis
Use when targeting specific customer segments
Best for new or niche markets
Most credible for investors
Builds from customer data and pricing
Value Theory
Use when creating new market categories
Best for disruptive innovations
Estimates based on value creation
Calculates willingness to pay for problem solution
Detailed patterns and worked examples
Detailed pattern documentation lives in references/details.md. Read that file when the navigation tier above is insufficient.
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