SAM
Serviceable Addressable Market
Definition
The portion of the total addressable market that a business can realistically serve given its current product, geographic reach, and business model constraints.
Why it matters
SAM is a more honest number than TAM. Investors and founders who plan from TAM without grounding in SAM build unrealistic forecasts. SAM focuses ambition on the actual market within current reach.
Example
A founder builds a legal document tool. The TAM is the entire global legal software market worth billions. Her SAM is domestic small businesses needing employment contracts, representing a £120 million annual market she can realistically serve with her current product and distribution.
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