Entrepreneurs often misuse TAM, SAM, SOM in their pitch decks by either inflating the numbers or lacking a clear understanding of their significance.
SOM (Serviceable Obtainable Market) represents the portion of SAM that can be captured in the next 1-3 years.
Investors focus on SOM as it demonstrates a credible plan for gaining traction and sustainable growth.
A bloated TAM without a realistic SOM indicates superficial research, while a well-supported SOM with growth assumptions showcases market understanding.
It is crucial to align SOM with the go-to-market (GTM) strategy, ensuring it corresponds to sales and marketing efforts.
Start by focusing on one segment of SOM, executing it effectively before expanding further.