Complete Definition
Serviceable Obtainable Market (SOM) is the portion of SAM you can realistically capture in the near term. It's your realistic market share target based on competition, resources, and go-to-market capabilities.
How to Calculate SOM
SOM = SAM × Realistic Market Share Percentage
Or for early-stage: SOM = Number of Realistic Customers × Average Revenue
Factors Affecting SOM
- Competitive intensity - Sales and marketing resources - Brand awareness - Product maturity - Channel partnerships - Go-to-market efficiency - Time in market
SOM Planning
- **Year 1**: 0.5-2% of SAM for new entrants - **Year 3**: 2-5% of SAM with traction - **Year 5**: 5-15% of SAM with strong execution
Why SOM Matters
- Most realistic revenue projection - Grounds your forecasts in reality - Shows you understand competition - Basis for financial projections - Guides resource allocation
Credible SOM Presentations
Back up SOM claims with: - Comparable company growth rates - Channel capacity analysis - Sales team productivity assumptions - Marketing funnel metrics