Concept
TAM
Also known as: Total Addressable Market
Total Addressable Market — the total revenue opportunity if every potential customer in your segment converted.
TAM (Total Addressable Market) is the theoretical maximum revenue a product can generate, assuming 100% market share. It's typically calculated as (potential customers) × (average annual contract value).
TAM, SAM, and SOM together form the market funnel. TAM is the outer layer, used for strategic investor pitches and growth-potential analysis. A realistic TAM calculation works bottom-up (from segment data) rather than top-down (from industry reports).