The market size slide.

And yes, it can quietly kill a deal.

Because if your market math doesn’t make sense, your return math doesn’t either.

So here’s how to actually size your market properly.

First, the three terms:

TAM (Total Addressable Market) : The total revenue opportunity if you captured 100% of the market.

Basic formula:

TAM = Total potential customers × Average annual revenue per customer

Example: 100,000 potential customers × $200/year = $20M TAM

If you’re wondering where to get those numbers: – Industry reports (Statista, IBISWorld, McKinsey, government data) – Census data – Industry associations – Competitor revenue benchmarks – Customer surveys × pricing assumptions

SAM (Serviceable Addressable Market) : The portion of TAM you can serve with your current model (geography, segment, regulation).

Formula:

SAM = Target segment customers × Average revenue per customer

If only 25,000 of those 100,000 customers are in your actual launch market:

25,000 × $200 = $5M SAM

To estimate this properly: – Narrow by geography (where you can legally operate) – Narrow by segment (who actually fits your ICP) – Narrow by distribution (who you can realistically reach)

SOM ( Serviceable Obtainable Market) : The part of SAM you can realistically capture in the next 12–36 months.

This is where most founders get vague.

Formula:

SOM = SAM × Realistic market penetration %