Investing
Total Addressable Market (TAM)
Total Addressable Market (TAM) is the total revenue opportunity available for a product or service if it captured 100% of its target market. It's the upper bound of how big a business can get.
TAM, SAM, SOM
| Level | Definition | Example (Project Management SaaS) |
|---|---|---|
| TAM | Total market if you served everyone | $50B — all project management software globally |
| SAM | Serviceable Addressable Market — the segment you can reach | $5B — SMB project management in English-speaking markets |
| SOM | Serviceable Obtainable Market — what you can realistically capture | $50M — your target niche in the first 3 years |
Calculation Methods
Top-Down
Start with industry research and narrow down:
TAM = Total industry revenue × Your relevant segment %Bottom-Up (More Reliable)
Start with your unit economics and scale up:
TAM = Number of potential customers × Annual revenue per customerValue Theory
Calculate based on value delivered:
TAM = Number of potential users × Value of problem solved per userWhy TAM Matters for Investors
TAM determines the ceiling of an investment's return:
- Large TAM ($1B+) = potential for massive returns, attracts competition
- Medium TAM ($100M–$1B) = strong returns possible, manageable competition
- Small TAM (< $100M) = limited upside, but can dominate the niche
The EvolC Market TAM
The market for investing in AI-run companies is brand new. Here's how we size it:
- Online business acquisitions market: ~$5B annually (Flippa, Empire Flippers, Acquire.com)
- Fractional investment platforms: ~$10B (republic, Wefunder, equity crowdfunding)
- AI SaaS market: ~$100B+ (and growing rapidly)
- EvolC's TAM: The intersection — fractional ownership of AI-run businesses. Estimated $1–5B within 5 years as the model proves out.