SOM (Serviceable Obtainable Market)
The portion of the serviceable available market that you can realistically capture in the short to medium term.
Definition
Serviceable Obtainable Market (SOM) represents the realistic market share you can capture within your SAM, considering competitive landscape, resources, execution capabilities, and market entry timeline. It's the most practical and actionable market size metric for business planning.
How to Calculate SOM
Bottom-Up Approach:
SOM = Market Share % × SAM
Factors Affecting SOM:
Market Share Considerations
New Market: 5-15% market share possible for early entrants
Established Market: 1-5% realistic for new entrants
Highly Competitive: 0.1-1% challenging to achieve
Real-World Example
New CRM Software Startup:
- • SAM: $2 billion (mid-market CRM in target region)
- • Realistic market share in 5 years: 0.5%
- • SOM = $2B × 0.5% = $10 million
This represents achievable revenue target based on realistic market capture.
Why SOM Matters
Revenue Planning
Sets realistic revenue targets and growth expectations
Resource Allocation
Guides investment in sales, marketing, and operations
Investor Communication
Shows realistic and achievable market opportunity