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

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