Metrics & KPIs
TAM
Total Addressable Market - the total revenue opportunity available if 100% market share is achieved.
Full Definition
TAM (Total Addressable Market) represents the total revenue opportunity available for a product or service if you achieved 100% market share. It's the broadest measure of market size and helps investors understand the maximum potential of a business. TAM is typically calculated using top-down (industry research) or bottom-up (pricing × total potential customers) approaches.
Formula
TAM = Total potential customers × Average revenue per customer
Examples
- 1The global e-commerce TAM is over $5 trillion
- 2For a B2B SaaS, TAM might be calculated as: 500,000 potential companies × $10,000 annual contract = $5B TAM
Try it with Denovo
Use our AI-powered tools to apply tam concepts to your startup idea.
Market size analysis