Market sizing is a critical step in any business strategy. Whether you are entering a new market, launching a product, or building a business case, understanding the true size of your opportunity helps you make better decisions and avoid wasted investment. At White Space Strategy, we see too many businesses focus on the biggest number they can find—Total Addressable Market (TAM)—without thinking about what is actually achievable. Here’s how to get market sizing right, and why it matters.
Start with the Basics: TAM, SAM, and SOM
When sizing a market, it’s important to be clear about what you are measuring:
- TAM (Total Addressable Market): The total demand for your product or service, assuming no constraints. This is the broadest possible view, often used to show the full potential of a market.
- SAM (Serviceable Available Market): The portion of the TAM you can actually serve, based on your business model, geography, or other limits. This narrows the focus to what is realistically accessible.
- SOM (Serviceable Obtainable Market): The share of the market you can realistically win, given your resources, competition, and go-to-market plan. This is the most practical and actionable number for planning.
Tip: Don’t just focus on TAM. SOM gives you a more realistic view of what you could achieve. Investors and boards are increasingly looking for evidence that you understand the difference.
Validate Your Numbers with Research
Market sizing is not just a desk exercise. Good research is essential, especially in niche or fast-changing markets. Use a mix of:
- Desk research: Industry reports, public data, competitor analysis, and trade association statistics. This is a good starting point but be wary of outdated or generic figures.
- Qualitative research: Interviews with customers, suppliers, and market experts to test your assumptions and fill gaps. This is especially important if you are exploring a new or niche market where published data is limited.
- Quantitative research: Surveys or data analysis to validate your estimates and check for consistency.
Segment for Targeting
Not all parts of a market are equal. Segment your market to identify where the best opportunities lie. Look at:
- Customer needs and behaviours
- Geography
- Industry verticals
- Purchase channels
- Company size or type
Segmentation allows you to focus your resources on the areas with the highest potential for success. It also helps you develop more targeted propositions and marketing strategies.
Keep Inputs Flexible and Refine as You Go
Market sizing is rarely perfect on the first attempt. Use your initial estimate as a starting point. As you gather more information—through pilot projects, sales data, or customer feedback—refine your numbers. Be open about the assumptions you’ve made and update your model as you learn.
- Start with a range, not a single number.
- Document your assumptions and sources.
- Adjust your model as you get real-world feedback.
How White Space Strategy Approaches Market Sizing
At White Space Strategy, we combine desk research, expert interviews, and data analysis to build robust, actionable market sizing models. We work closely with clients to:
- Define realistic SOM targets, not just TAM headlines.
- Segment the market for focused targeting.
- Validate assumptions with real-world feedback.
- Build flexible models that adapt as new data comes in.
We have supported clients in sectors from technology to industrials, helping them avoid costly mistakes and make confident, data-driven decisions.
Key Points to Remember
- Define TAM, SAM, and SOM clearly.
- Use a mix of desk and qualitative research to validate your numbers.
- Segment your market to focus on the best opportunities.
- Keep your model flexible and refine as you go.
If you need support with market sizing, White Space Strategy is here to help. We specialise in market entry strategy, opportunity identification, competitor analysis, and more.
Get in touch to discuss how we can support your next move.