Market sizing for startups
TAM, SAM, and SOM estimates with the sources and assumptions written down, so you can defend the arithmetic to an investor or to your own team.
Sizing that shows its work
Market sizing for startups is most useful when someone else can follow it. An investor will usually ask how a number was built, and an answer of "a report said so" does not hold up well. Our Growth package, at $1,999, produces TAM, SAM, and SOM estimates with documented sources and assumptions.
The package builds on Launchpad, so the competitive landscape and market context come with it.
Founders who size a market themselves often use a top-down figure from a general report, such as a small percentage of a very large number. That approach is quick, but it is hard to defend, because the percentage is rarely tied to evidence. A bottom-up build is slower and easier to examine.
What the Growth package includes
- Everything in Launchpad.
- TAM, SAM, and SOM estimates with documented sources and assumptions.
- Expanded competitor and segment analysis.
- Customer, buyer, and channel research.
- Demand drivers and adjacent-market analysis.
- An expanded written report with a source appendix.
- One included add-on of your choice.
- One round of revisions.
The included add-on can be a standard item generally priced at $250, such as a competitor matrix, a pitch deck review, or an investor and partner target list. You choose it during scoping.
How the estimates are built
TAM is the total demand for a product category. SAM is the part of it your product and go-to-market could serve. SOM is the share you could realistically obtain. Our approach is bottom-up where data allows: count the units or accounts, apply a price, then narrow by segment, geography, and channel.
A simple hypothetical shows the structure. If 1,000,000 potential buyers each pay $100 a year, the total is $100 million. If your product serves 20% of them, that is $20 million, and a 10% share of that is $2 million. In a real report each of those inputs has a source or a stated assumption.
For a longer explanation, read how to size a market for a new device and TAM, SAM, and SOM for medical devices.
Medical device markets add wrinkles, such as differing buyers and reimbursement. The method is the same, and the guides above walk through those wrinkles for devices specifically.
Buyer and channel research
Numbers only mean something if you know who buys and how. The Growth package looks at customer segments, who makes the purchase decision, and which channels reach them. This feeds the SAM and SOM, because a channel you cannot access shrinks your serviceable market.
Adjacent markets are screened where they affect the picture, which helps when a first market is small but a neighbor is larger.
Where public data is thin, we say so and show the assumption used in its place. Readers can then change that assumption and see how the result moves. If you want a formal model that does this in a spreadsheet, the Comprehensive package includes a five-year revenue model in editable Excel.
Using it for fundraising
Founders commonly use the sizing in a pitch deck or data room. The source appendix lets an investor trace each input. Our guide on competitor analysis for a pitch deck covers the other half of that section.
We provide research and analysis. We do not provide investment advice, and we do not guarantee how any investor will respond. Estimates are estimates, and the report states the assumptions that matter most. For a raise, the Investor Readiness Bundle combines Growth, Patent Landscape Research, and a pitch deck review for $3,199.
A good test of any sizing is whether a skeptical reader can rebuild it. We write the report with that reader in mind.
Terms and sample
Growth is $1,999, with a $999.50 deposit to start and the remainder on completion. Samples of our report format are on the work page, including a Growth-format market report. See services and pricing, or book a discovery call. Device teams should also see our competitive landscape page.
Common questions
What does Growth cost?
Will investors accept the numbers?
Is sizing included in Launchpad?
Do you update the numbers later?
Related
Need market numbers you can explain?
Book a discovery call and we will scope sizing for your product and audience.