In a recent LinkedIn post, Eric Partaker delves into the critical business concepts of Total Addressable Market (TAM), Serviceable Available Market (SAM), and Serviceable Obtainable Market (SOM), offering a practical framework for founders to assess their business potential and set realistic goals. Partaker emphasizes that while a “billion-dollar idea” sounds appealing, its actual market value hinges on a granular understanding of these market sizing metrics.
Partaker illustrates the distinction with relatable analogies and real-world examples, framing TAM as the broadest possible market, SAM as the segment within reach, and SOM as the portion realistically achievable in the short to medium term. He uses the analogy of pizza delivery: TAM is everyone on Earth who could buy pizza, SAM is people in cities where delivery is possible, and SOM is the number of houses his service can actually reach this year.
“Each step gets smaller. Each step gets more real. Each step gets more achievable.”
The post highlights how major companies like Uber, Netflix, and Zoom have strategically navigated these market segments. For instance, Uber’s TAM is the entire transportation market ($5.7 trillion), its SAM is the legal rideshare market in reachable cities ($1.5 trillion), and its SOM was projected at $150 billion within a five-year target. This tiered approach, Partaker explains, is crucial for business planning and investor relations.
Why Market Sizing Matters for Startups
According to Partaker, understanding TAM, SAM, and SOM is not just an academic exercise; it’s fundamental for a startup’s survival and growth. Investors require all three figures to gauge a company’s potential and its founder’s grasp of the market.
Partaker outlines the specific roles each metric plays:
- TAM demonstrates the ultimate dream and the sheer size of the opportunity.
- SAM shows that the business has identified a realistic and accessible portion of the market.
- SOM provides concrete evidence of the company’s ability to execute and capture a defined segment.
He warns against common pitfalls that can derail startups, such as projecting revenue based solely on TAM, overestimating SAM, or neglecting the competitive landscape within SOM. Partaker states:
“Using TAM for revenue projections” is a common mistake that kills startups.
Furthermore, Partaker points out that most startups realistically capture only 1-5% of their SAM, a process that typically takes 5-10 years, and is constantly influenced by competition and customer inertia.
The Power of Focusing on SOM
The core message from Partaker’s post is the immense strategic advantage that comes from accurately defining and focusing on the Serviceable Obtainable Market (SOM). He argues that a clear vision of SOM is a “superpower” that enables founders to set honest goals, attract the right funding, build effective teams, and choose the most suitable strategies.
Shifting the Founder’s Mindset
Partaker encourages founders to reverse their typical approach. Instead of starting with a vast TAM and trying to shrink it down, he advises starting with SOM and working backward. This ensures that the business plan is grounded in achievable realities rather than aspirational, yet potentially unrealistic, market sizes.
“Your ‘small’ SOM might be perfect. A $10M business changes lives. A $100M business creates dynasties.”
He concludes by urging founders to “Stop chasing someone else’s TAM. Start building your SOM,” emphasizing that even a seemingly modest SOM can lead to a highly successful and impactful business.
📝 About This Content
This article is based on insights shared by Eric Partaker on LinkedIn.
📅 Originally posted on November 4, 2025 | View original post on LinkedIn →