You’re building the market slide for a raise. TAM and SAM came out of a spreadsheet in an afternoon. The third circle, the serviceable obtainable market, is the one an investor will ask about, because it’s the only one that says what your team can actually win.
Most decks fill that circle with a percentage of SAM. It’s quicker, and it’s the version that gets picked apart in diligence. Below is how to calculate serviceable obtainable market three ways, which one to use at your stage, and the factors that move it.
SOM is the part of SAM your team can win in a set period
Serviceable obtainable market (SOM) is the share of your serviceable addressable market you can realistically win in a set period, given the team, channels, pricing and competition you have. The short definition is on our SOM glossary page. This post is about calculating it and defending it.
The three numbers nest inside each other, and each answers a different question.
| Number | Question it answers | Built from |
|---|---|---|
| TAM | How big could this get? | Every company that could buy × annual price |
| SAM | What can we serve today? | TAM minus regions, sizes and systems you can’t serve |
| SOM | What can we win this period? | Accounts your team can work × conversion × price |
SAM is also written “serviceable available market”. It’s the same idea. If you haven’t built TAM and SAM from an account count yet, start with bottom-up market sizing, because SOM inherits every assumption above it.
How to calculate serviceable obtainable market
Three formulas show up in most guides. They suit different stages, and only one works before you have revenue.
| Method | Formula | Use it when | Weak spot |
|---|---|---|---|
| Share of SAM | SAM × expected market share | A quick sanity check | The share is a guess nobody can test |
| Last year’s share | (Last year’s revenue ÷ last year’s SAM) × this year’s SAM | You have a year of revenue and a stable SAM | Assumes this year’s team and channels match last year’s |
| Sales capacity | Accounts worked × opportunity rate × win rate × ACV | Pre-revenue, early revenue, or a plan that changes the team | Takes longer; needs honest conversion rates |
The last-year’s-share method is the one in most top-ranking guides. It’s sound, but check the percentage. $3M of revenue against a $100M SAM is a 3% share, not 0.03%, and a few of the popular worked examples slip a decimal there. It also needs last year’s revenue, which an early-stage startup doesn’t have. That’s why the capacity method is the one to put in a seed or Series A deck.
The capacity method, step by step
- Set the period. One year is easiest to check against results. State it on the slide.
- Count the accounts your team can work. Reps on the team in that period × accounts each can actively work. Include planned hires, with their ramp.
- Apply your conversion to opportunity. The share of worked accounts that become a qualified opportunity.
- Apply your win rate. Opportunities × win rate = new customers.
- Multiply by annual price. New customers × ACV = SOM in revenue.
- Divide by SAM. The result is the share you’re claiming, now with a method behind it.
A worked example
Illustrative numbers: a startup sells software to US freight brokers. Its SAM is 8,000 brokers at an average of $24,000 a year, so $192M. The sales team can work about 1,500 accounts in the year. From what the team has seen so far, 30% of worked accounts reach a qualified opportunity and a quarter of those close.
- Opportunities. 1,500 × 30% = 450
- New customers. 450 × 25% = about 112
- SOM. 112 × $24,000 = about $2.7M, or 1.4% of SAM
The share looks small next to “5% of a $192M market”, which would be $9.6M. The $2.7M is the number the team can be held to, and every input in it can be checked in the CRM a quarter later.
What time period should SOM cover?
Guides disagree. Some use the next one to three years, others three to five. Pick the period that matches how the number will be used, and write it next to the number.
- For the sales plan, use one year. It’s the period you can check against the CRM.
- For a pitch, use the period the round funds, and show the team the round pays for.
- For a five-year model, build year one from capacity and say what has to change (hires, channels, products) for the later years to hold.
Factors affecting serviceable obtainable market
Most guides list four factors: market size and reach, product, competition, and historical performance. For a B2B sales team those split into the inputs below, and SOM moves when any of them moves.
| Factor | How it moves SOM | What to check |
|---|---|---|
| Market size and reach | Accounts you can’t contact can’t be worked | Verified contact coverage on the list |
| Product fit | A missing integration or feature shuts out part of SAM | Closed-lost reasons by segment |
| Competition | Locked-in accounts aren’t obtainable | Competitor contract renewal dates |
| Historical performance | Your own rates are the best predictor | Last four quarters of conversion, by segment |
| Sales capacity | More reps, more accounts worked | Hiring plan and ramp time |
| Win rate and sales cycle | Long cycles push wins past the period | Win rate and median days to close |
| Price and ACV | Same customers, more revenue | ACV by company size |
| Retention | Churn takes back part of what you win | Churn rate in the period |
Two of these are easy to miss. Reach depends on data: if half the accounts in your SAM have no verified contact for the buyer, your team can’t work them this year. Competition depends on contracts: a segment where most companies just signed multi-year deals with a competitor is serviceable on paper and closed in practice.
What share of the market to claim in a pitch
Investors have seen a lot of “10% of the market” slides. Pear VC’s market sizing guide (2021) notes that pitch decks often state a 10% potential share, while tech companies at IPO have typically held 0.1% to 2% of their addressable market, based on S-1 data. One Series A investor in Pear’s survey of 30 VCs put it plainly: “A bottom-up build of future revenue is more useful than basing SOM on a hypothetical % share of TAM or SAM.”
The smallest circle also gets the most attention. Pitch Doctor, written by a former VC, warns that investors focus on the lowest number and anchor to it. So the slide that holds up shows how the SOM was built, not just the circle.
- The period. One year, or the period your raise funds.
- The team behind it. Reps today and the hires the round pays for.
- The conversion rates. Your own if you have them, labeled as assumptions if you don’t.
- The share it implies. Stated against SAM, so the investor sees you know it’s small.
Check that your revenue plan fits inside it. If the financial model shows more revenue in year one than the SOM, one of the two is wrong, and an investor will notice before you do.
SOM grows when the team behind it grows
Because SOM is built from capacity, it changes when the team changes. Datatruck started with one embedded AE, and we built the outbound motion around them: the ICP, the messaging, HubSpot from scratch, the dashboards. That grew into a pod, then a self-serve signup channel, then a post-sale team. Datatruck went from $200K to $2.5M ARR while we ran the motion.
Each step there added accounts the team could work or a channel that reached accounts it couldn’t, which is exactly what moves the capacity math. None of it needed a bigger market.
How to grow SOM without changing markets
There are four inputs you can move inside the market you already serve.
- Add capacity. More reps, or a Sales Pod that works accounts your team can’t reach.
- Raise win rate. Tighter qualification and better discovery calls convert more of the same pipeline.
- Raise ACV. Packaging and pricing by company size.
- Open a channel. A self-serve or partner channel reaches accounts outbound can’t.
When all four are working and the list is still running out, the next move is a bigger market, not a bigger SOM. That’s TAM expansion, and it starts from a different set of signals.
Check SOM against the pipeline every quarter
A SOM is only useful if it’s compared with what happens. Each quarter, put the inputs next to the CRM: accounts worked, opportunities created, win rate, ACV. If one is off, the SOM was wrong in a specific place, and you know which part of the plan to change.
The same comparison tells you how much pipeline you need for the rest of the year. Our page on pipeline coverage shows how to turn the SOM into a quarterly pipeline target your team can work against.
Sani Zehra
I’m a Content & SEO Specialist at Phi Consulting, where I help founders turn half-baked GTM ideas into sharp content that people actually read. Before this, I built content systems for a marketplace app, wrote AI voice agent scripts.
With an educational background in Broadcasting & Digital Media, storytelling’s been in my bones long before it became a KPI. I like clean content, clear structure and writing that doesn’t talk down to smart people.