shipshitdev/market-sizer

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 |

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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