What is Total Addressable Market (TAM)?

TAM is the total market demand for your product or service. It's the revenue you could earn if you had 100% market share. In B2B, understanding your TAM helps guide strategy and investment decisions.

Calculating TAM often involves market research and data analysis. You might look at industry reports, government data, or conduct your own surveys. The goal is to estimate how many potential customers exist and how much they might spend.

TAM is usually broken down into smaller segments. These might include serviceable available market (SAM) and serviceable obtainable market (SOM). This helps set realistic growth targets.

Many B2B companies use TAM when planning new products or entering new markets. It helps assess the potential return on investment. A large TAM can attract investors, but it's important to balance this with your ability to capture market share.