In a recent LinkedIn post, Eric Partaker dives 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. Partaker emphasizes that while a grand vision is important, a clear understanding of achievable market segments is paramount for sustainable growth and investor confidence.
The post opens with a direct challenge to the common startup mythos: “Your ‘billion-dollar idea’ might be worth millions. (Or just thousands.)” Partaker then proceeds to demystify TAM, SAM, and SOM using relatable analogies and real-world examples from major companies like Uber, Netflix, and Zoom.
“TAM = Everyone on Earth who could buy pizza. SAM = People in cities where you can deliver. SOM = Houses you’ll actually reach this year.”
This simplified explanation, Partaker argues, makes the distinction between the theoretical maximum market and the realistic, attainable portion much clearer for entrepreneurs.
Understanding the Market Segmentation Framework
Partaker meticulously breaks down how these market segments apply to successful companies, illustrating the progressive narrowing of focus required for execution. For Uber, the TAM is all transportation, while SAM narrows to legal rideshare cities, and SOM represents their achievable target within a specific timeframe.
Key Takeaways from Partaker’s Analysis
The core message from Eric Partaker’s post is that while TAM represents the ultimate dream and SAM indicates market realism, it is SOM that demonstrates execution capability. He cautions against common startup pitfalls:
- Using TAM for revenue projections
- Ignoring competition in SOM
- Making SAM unrealistically large
- Forgetting regulatory constraints
As Partaker highlights, “Investors need all three numbers.” However, he stresses that focusing solely on a vast TAM can be misleading. The true power, according to Partaker, lies in accurately defining and pursuing one’s SOM.
“Knowing your real SOM is a superpower. It helps you: Set honest goals, Raise the right funding, Hire the right team, Pick the right strategy.”
Partaker advocates for a backward-planning approach, starting with SOM and working towards SAM and TAM, rather than the reverse. This method, he suggests, allows founders to set achievable goals and build businesses of significant, albeit potentially not astronomical, scale.
The Power of a Focused SOM
The article points out that many startups fail by overestimating their market reach or underestimating competitive pressures. Partaker notes, “Most startups capture 1-5% of SAM” and that it typically takes “5-10 years” to achieve this, with competition being a constant factor.
“Your ‘small’ SOM might be perfect. A $10M business changes lives. A $100M business creates dynasties.”
This perspective reframes the definition of success, suggesting that building a substantial business within a well-defined SOM can be far more impactful and achievable than chasing an overly ambitious TAM. Partaker encourages founders to “Stop chasing someone else’s TAM. Start building your SOM.” He concludes by offering a free PDF cheat sheet and urging readers to share the insights with fellow entrepreneurs, reinforcing the value of this fundamental business strategy.
📝 About This Content
This article is based on insights shared by Eric Partaker on LinkedIn.
📅 Originally posted on February 5, 2026 | View original post on LinkedIn →