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market-sizing

TAM/SAM/SOM market sizing with top-down and bottom-up estimation methods, cross-validation of assumptions, and divergence reconciliation. Generates investor-ready materials with growth projections and

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Imported from yonatangross/orchestkit (src/skills/market-sizing/SKILL.md). Install upstream with npx skills add yonatangross/orchestkit --skill market-sizing. Copyright stays with the author.

Market Sizing

TAM/SAM/SOM framework for estimating addressable market and validating opportunity size.

Definitions

Metric Definition Question It Answers
TAM Total Addressable Market — everyone who could possibly buy "What's the theoretical ceiling?"
SAM Serviceable Addressable Market — segment you can actually reach "What can we realistically target?"
SOM Serviceable Obtainable Market — realistic share in 3 years "What will we actually capture?" 
+-------------------------------------------------------+
|                         TAM                            |
|  +---------------------------------------------------+ |
|  |                      SAM                           | |
|  |  +-----------------------------------------------+| |
|  |  |                   SOM                          || |
|  |  +-----------------------------------------------+| |
|  +---------------------------------------------------+ |
+-------------------------------------------------------+

When to Use Top-Down vs. Bottom-Up

Method Use When Risk
Top-Down Industry reports exist; investor pitch; quick estimate Overestimates SOM
Bottom-Up Sales capacity known; pricing validated; more credible More work; requires assumptions
Both (recommended) High-stakes decisions; fundraising; board decks Cross-validate to build confidence

Always cross-validate both methods and reconcile within 20%. If they diverge by more than that, revisit your assumptions.

Quick Formulas

Top-Down
  TAM = (# potential customers) × (annual value per customer)
  SAM = TAM × (% your solution can address)
  SOM = SAM × (realistic market share % in 3 years)

Bottom-Up
  SOM = (# customers you can acquire) × (average deal size)
  SAM = SOM / (your expected market share %)
  TAM = SAM / (your segment as % of total market)

Example: AI Code Review Tool

## Market Sizing: AI Code Review Tool

### Top-Down

TAM
- Global developers: 28M
- Using code review tools: 60% → 16.8M
- Average annual spend: $300/developer
- TAM = $5.04B

SAM
- Enterprise only (>500 employees): 8M developers
- Willing to pay premium: 40% → 3.2M
- SAM = $960M

SOM
- Sales capacity supports ~$15M ARR (Year 3)
- Realistic market share: 2%
- Unconstrained SOM = $960M × 2% = $19.2M
- Constrained SOM = min($19.2M, $15M) = $15M

### Bottom-Up
- Target accounts Year 1: 50 enterprise deals
- Average ACV: $100K
- Year 1 ARR: $5M
- Year 3 (3× growth): $15M ARR → SOM = $15M

### Reconciled SOM: $15M (confirmed by both methods)

SOM Constraint Model

Do not report an unconstrained SOM. Always apply real-world limits:

SOM constraints:
  Sales capacity:       supports $15M ARR max
  Competitive pressure: 5 strong incumbents → −20% market share
  Go-to-market reach:   70% of SAM reachable with current channels

Conservative SOM = min(
  SAM × target_share%,
  sales_capacity_ceiling,
  SAM × gtm_reach% × target_share%
)

Confidence Levels

Confidence Evidence Required
HIGH Multiple corroborating sources, data < 2 years old
MEDIUM Single authoritative source, 1-2 years old
LOW Extrapolated, heavy assumptions, data > 2 years old

Always label each number with its confidence level in deliverables.

Common Mistakes

Mistake Correction
TAM = "everyone on earth" Define a specific, bounded customer segment
SOM = 10% of a billion-dollar market Apply actual sales capacity and GTM constraints
Single method only Cross-validate top-down and bottom-up
Old data Use sources < 2 years old; flag if older
Ignoring competition SOM must account for incumbents' share

References

Related Skills

  • ork:competitive-analysis — Understand competitive dynamics that constrain SOM
  • ork:business-case — Build financial justification once opportunity is sized
  • ork:product-frameworks — Full product strategy toolkit

Version: 1.0.0

Use it

Copy one of these into your project. Installing also returns the manifest and these snippets.

yaml
targets:
  - https://api.opensmartroute.ai/api/v1/registry/yonatangross-orchestkit-market-sizing/manifest   # or paste the manifest below

Manifest

An Open Capability Manifest: the router reads it to know what this does, what it costs and when to pick it.

yonatangross-orchestkit-market-sizing.ocm.jsonjson
{
  "ocm": "1",
  "id": "yonatangross-orchestkit-market-sizing",
  "kind": "skill",
  "name": "market-sizing",
  "description": "TAM/SAM/SOM market sizing with top-down and bottom-up estimation methods, cross-validation of assumptions, and divergence reconciliation. Generates investor-ready materials with growth projections and confidence intervals. Use when estimating addressable markets, validating opportunity size, or preparing pitch deck market slides.",
  "publisher": "yonatangross",
  "version": "1.0.0",
  "capabilities": {
    "domains": [
      "general"
    ],
    "tags": [
      "skill-md",
      "tam",
      "sam",
      "som",
      "market-size",
      "addressable-market",
      "opportunity-sizing",
      "skills-sh"
    ],
    "languages": [
      "en"
    ]
  },
  "quality_prior": 0.6,
  "examples": [
    "TAM/SAM/SOM market sizing with top-down and bottom-up estimation methods, cross-validation of assumptions, and divergence reconciliation. Generates investor-ready materials with growth projections and confidence intervals. Use when estimating addressable markets, validating opportunity size, or preparing pitch deck market slides."
  ],
  "primary": false,
  "metadata": {
    "source": {
      "provider": "skills.sh",
      "repository": "https://github.com/yonatangross/orchestkit",
      "path": "src/skills/market-sizing/SKILL.md",
      "ref": "HEAD",
      "url": "https://github.com/yonatangross/orchestkit/blob/HEAD/src/skills/market-sizing/SKILL.md",
      "key": "yonatangross/orchestkit/src/skills/market-sizing/SKILL.md"
    },
    "compatibility": "Claude Code 2.1.251+",
    "allowed_tools": [
      "Read",
      "Glob",
      "Grep",
      "WebFetch",
      "WebSearch"
    ]
  },
  "instructions": "# Market Sizing\n\nTAM/SAM/SOM framework for estimating addressable market and validating opportunity size.\n\n## Definitions\n\n| Metric | Definition | Question It Answers |\n|--------|------------|---------------------|\n| **TAM** | Total Addressable Market — everyone who could possibly buy | \"What's the theoretical ceiling?\" |\n| **SAM** | Serviceable Addressable Market — segment you can actually reach | \"What can we realistically target?\" |\n| **SOM** | Serviceable Obtainable Market — realistic share in 3 years | \"What will we actually capture?\" |\n\n```\n+----------------------------------------------",
  "cost": {
    "context_tokens": 1087
  }
}

Fetch it by URL: GET /api/v1/registry/yonatangross-orchestkit-market-sizing/manifest?version=1.0.0

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