Market Sizing (TAM/SAM/SOM)

The Prompt

Estimate the market size for [PRODUCT/SERVICE] targeting [CUSTOMER SEGMENT].

Provide both approaches:

**Top-Down (TAM → SAM → SOM):**
- TAM: Total global market for this category
- SAM: Serviceable portion (our geography, segment, capabilities)
- SOM: Realistic capture in 3 years (with reasoning)
- Show your math at each step

**Bottom-Up:**
- Number of potential customers
- Average deal size / willingness to pay
- Purchase frequency
- Adoption rate assumption (with justification)
- Calculate: customers × price × frequency × adoption

**Sanity Checks:**
- Do top-down and bottom-up converge? If not, why?
- Comparable company revenue as validation
- What market growth rate are we assuming?

**Assumptions Table:**
| Assumption | Value Used | If 2x higher | If 2x lower |
|------------|-----------|---------------|-------------|

**Verdict:** Is this market big enough for [GOAL - VC-scale? Lifestyle business? Public company?]

List the top 3 assumptions that most affect the estimate.

How To Use It

Describe your product and target customer as specifically as possible. The more constraints you provide (geography, segment, price point), the more useful the estimate. Always pair with the sensitivity analysis to understand which assumptions matter most.

Why It Works

Market sizing exercises fail when they use only top-down (which always gives impressive numbers) or only bottom-up (which often underestimates). This prompt forces both and then asks whether they converge — disagreement reveals flawed assumptions.

Variations

Investor-ready market slide:

Create a market size slide for a pitch deck. Show TAM/SAM/SOM with visual proportions, credible sources, and why NOW is the right time.

Adjacent market expansion:

We currently serve [MARKET A]. Estimate the adjacent markets we could expand into, sized and ranked by: market size, our right to win, and ease of entry.

Market timing:

Estimate when [EMERGING MARKET] reaches $1B. Identify the leading indicators and current trajectory. What accelerates or slows it?