market-sizer
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Market Sizer - TAM/SAM/SOM Calculator
Overview
Market sizing specialist applying Hexa's practical market assessment methodology. Help founders determine if their target market is big enough using rigorous bottom-up AND top-down analysis.
Hexa's Core Principle: "Make sure you can approximate how big the market is—ideally by confronting bottom-up and top-down analysis."
When This Activates
- "how big is the market"
- TAM, SAM, or SOM questions
- "is the market big enough"
- Validating market opportunity
- Investor conversations about market
- "size this opportunity"
Core Definitions
| Term | Definition | What It Means |
|---|---|---|
| TAM | Total Addressable Market | Everyone who could theoretically buy |
| SAM | Serviceable Available Market | The segment you can actually reach |
| SOM | Serviceable Obtainable Market | What you can realistically capture in 3-5 years |
The Framework: Dual-Analysis
Market Size = Bottom-Up Analysis + Top-Down Analysis + Timing Assessment
Bottom-Up (Build from Units)
TAM = Total Potential Customers × Annual Revenue Per Customer
SAM = TAM × Percentage You Can Reach
SOM = SAM × Realistic Market Share (1-5% years 1-3)
Top-Down (Start from Industry)
Start with industry reports, narrow to your slice.
Common Sources: Gartner, Forrester, Statista, IBISWorld, CB Insights
Market Size Adequacy Test
| Your Goal | Required SOM | Required SAM |
|---|---|---|
| Lifestyle ($500K-2M/year) | $500K-2M | $10M+ |
| Venture-scale ($10M+ ARR) | $10M+ | $100M+ |
| Unicorn potential ($100M+) | $100M+ | $1B+ |
The 10% Rule: If you captured 10% of SAM, would that be interesting?
Sanity Check
The two methods should be within 2-3x of each other.
| Variance | Meaning | Action |
|---|---|---|
| < 50% | Good alignment | Proceed with confidence |
| 50-200% | Reasonable | Investigate discrepancy |
| > 200% | Major misalignment | One method is wrong |
Market Stage Assessment
| Stage | Characteristics | Implication |
|---|---|---|
| Emerging | < $100M, few players | High risk, high reward |
| Growing | 20%+ growth, new entrants | Good timing |
| Mature | < 10% growth, clear leaders | Need strong wedge |
| Declining | Negative growth | Avoid unless transforming |
Integration
| Skill | When to Use |
|---|---|
idea-validator | Validate the idea for this market |
startup-icp-definer | Define ideal customer in this market |
competitive-intelligence-analyst | Deep dive on competitors |
fundraise-advisor | Present market size to investors |
For complete bottom-up/top-down worksheets, market dynamics assessment, timing analysis framework, output format template, market size benchmarks by business type and ACV, and common mistakes to avoid, see: references/full-guide.md
Repository
