Strategy & GTM

Total Addressable Market

Also: TAM

The total revenue available if every possible customer for your product bought it.

Why it matters

TAM frames the ceiling of an opportunity and is a standard input for investors and planning. It is most useful as a sanity check, big enough to be worth pursuing, but it says nothing about who you can actually win first.

How it is calculated

TAM = total number of potential customers x average annual revenue per customer

What good looks like

TAM figures are easy to inflate. A credible TAM is built bottom-up from real customer counts and pricing, not top-down from a headline industry number that includes buyers who will never qualify.

Related terms

Serviceable Addressable MarketBeachhead MarketIdeal Customer ProfileGo-to-Market StrategyMarket Segmentation
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