How do I build a credible SOM model?

Work forward from capacity, not backward from desired number. How many salespeople will you have year 1, 2, 3? What's a realistic close rate? What's your expected churn? Build the customer count model from these assumptions, then multiply by ACV. The number you get is your SOM — own it, even if it feels small.

Should SOM be in the pitch deck?

Yes — present TAM, SAM, SOM together on one slide with clear derivation. The purpose: show investors you understand market opportunity (TAM), your actual addressable segment (SAM), and your realistic plan (SOM). The transition from SAM to SOM via your business plan is the most credible part of the market slide.

What is a realistic SOM for pre-seed vs seed vs Series A companies?

Pre-seed: first 50–200 customers (proof of concept). Seed: 200–2,000 customers or ₹1–10 crore ARR equivalent. Series A: 5–50x from seed stage, proving the growth model works. Each stage's SOM is the target for the next fundraise, not the ultimate vision.

Glossary

SOM

Name: AletheiaAI
Author: Amit Tyagi

Serviceable Obtainable Market — your realistic market share target in the near term, typically 3-5 years.

By Amit Tyagi, Fitoor Capital · AletheiaAI Glossary

Definition

SOM (Serviceable Obtainable Market) is the realistic portion of SAM you can capture in a specific timeframe, given your resources, team, and competitive landscape. It's the "how big can we realistically get" number that translates market opportunity into business forecast.

SOM is calculated by working backward from your realistic assumptions: how many salespeople, what close rates, what geographic footprint, what retention rate. A 100-person sales team closing 2 deals/month each = 200 new customers/month = 2,400/year. At ₹2 lakh ACV = ₹48 crore ARR/year in new ARR. Cumulative over 3 years with churn = your SOM.

SOM should be the anchor for your financial projections, not TAM or SAM. If your 3-year plan implies 50% SOM capture, investors will question the assumptions behind every line.

India Context

Indian founders often present SOM numbers that imply implausible market share capture given their stage and capital. A ₹5 crore seed stage B2B SaaS claiming 15% of a ₹2,000 crore SAM in 3 years (₹300 crore ARR) is not credible — that would require ₹100+ crore of sales investment alone.

A useful India benchmark: seed-stage B2B SaaS companies should plan for ₹10–30 crore ARR in 3 years (year 3 milestone for Series A-ready metrics). Present this as your SOM, derive the team and capital needed to achieve it, and show how that investment produces this SOM.

Example

A recruitment SaaS has 30,000 target companies in SAM. With 3 salespeople closing 5 deals/month each, they add 180 customers/month. At 5% monthly churn, net customer growth ≈ 170/month. After 36 months: ~6,100 active customers × ₹3L ACV = ₹18 crore ARR. SOM = ₹18 crore ARR = ~0.6% of ₹3,000 crore SAM. Credible, investable.

Frequently Asked Questions

Related Terms

TAM

Total Addressable Market — the entire market demand for a product or service if …

SAM

Serviceable Addressable Market — the portion of TAM you can realistically reach …

Traction

Evidence that a startup's product is working — including revenue, users, growth …

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