TAM

TAM (Total Addressable Market) is the total revenue opportunity available if a product or service captured 100% of its target market. It's the top-level market size number that investors use to assess whether the opportunity is large enough to support a venture-scale business.

TAM is often confused with SAM (Serviceable Addressable Market — the portion you can realistically reach) and SOM (Serviceable Obtainable Market — your realistic near-term market share). A business needs a large enough TAM to justify venture backing — typically $1B+ for seed stage VC — but a believable path to capture meaningful SOM.

TAM must be calculated bottom-up (# of potential customers × average revenue per customer) not just cited from a market research report. A ₹2 lakh crore "healthcare market" means nothing — what's the specific revenue pool you can address with your product?

Indian founders commonly misuse the TAM slide in two ways: claiming all of India's ₹5 lakh crore healthcare spend as TAM when they're building a narrow diagnostic tool, or citing global market reports without adjusting for Indian price points (which are typically 5–20x lower than global benchmarks).

Indian VCs have become very sceptical of large TAM claims. The quality question is: "what is the specific payment flow you're capturing?" Not "how big is the adjacent market?" A ₹3,000 crore Indian SMB accounting software TAM is more credible than a "₹50 lakh crore SMB market" claim.