TAM is the total revenue opportunity if you captured 100% of your target market. It's a ceiling, not a target. Investors use it to gauge the size of the bet; founders use it to prioritize segments. The mistake most startups make: they cite a giant TAM to look impressive but can't explain how they'd actually get there. A credible TAM calculation is bottom-up, not top-down from a market research report.
For example, if there are 50,000 mid-market software companies in North America and each pays $24K/year for your product, your TAM is $1.2B.
We help founders build bottom-up TAM models that hold up in investor meetings — not just cite Gartner reports.
Related Terms
Relevant Cactus Services
We implement Total Addressable Market (TAM) strategies for B2B tech startups every day. Book a free 30-minute call to get a concrete plan for your situation.
Book a free strategy call →Ideal Customer Profile (ICP)
Your ICP is the precise description of the company most likely to buy, stay, and expand.
Sales Development Representative (SDR)
An SDR is the outbound hunter on your sales team — their job is to generate qualified meetings, not close deals.
Business Development Representative (BDR)
A BDR is similar to an SDR but often focuses on larger, more strategic accounts or outbound into new markets rather than a defined territory.
Serviceable Addressable Market (SAM)
SAM is the portion of TAM you can actually reach with your current GTM motion.
Serviceable Obtainable Market (SOM)
SOM is the slice of SAM you can realistically capture in the next 12–24 months given your resources, competition, and execution capacity.
Marketing Qualified Lead (MQL)
An MQL is a lead that marketing has flagged as sales-ready based on behavior or firmographic fit.