Business
What is Serviceable Obtainable Market (SOM)?
Learn about Serviceable Obtainable Market (SOM), the portion of the market your startup can realistically capture. Essential for business planning.
What is it?
Serviceable Obtainable Market (SOM) is the specific portion of the market that a startup can realistically capture in the short term. It's a subset of the Serviceable Available Market (SAM), which itself is a part of the Total Addressable Market (TAM). While TAM represents the entire potential market and SAM is the segment you can serve with your product, SOM is your actual target. It's calculated based on your current business model, sales channels, geographic limitations, and marketing resources. Think of it as your company's immediate revenue target within the next 1-3 years.
Why is it trending?
In today's competitive startup ecosystem, investors demand realism. The trend has shifted from being impressed by a massive TAM to scrutinizing a founder's practical go-to-market strategy. A well-defined SOM demonstrates that a startup has a grounded, actionable plan. It shows investors a clear path to early revenue and proves the founders understand their operational capabilities and limitations. This focus on achievable goals is crucial for securing early-stage funding and building a sustainable business from the ground up, making SOM a key metric in any pitch deck.
How does it affect people?
For startup founders and entrepreneurs, defining a clear SOM is critical. It dictates resource allocation, helps focus marketing and sales efforts, and sets realistic short-term business goals. It prevents teams from trying to 'boil the ocean' and instead concentrates their energy where it will have the most impact. For investors, SOM is a vital indicator of a startup's immediate potential and the team's strategic thinking. It helps them assess the viability of the business plan and forecast near-term returns on their investment, making it a cornerstone of due diligence.