home / skills / shipshitdev / library / market-sizer

market-sizer skill

Q: What’s the simplest way to estimate TAM?

Multiply total potential customers by annual revenue per customer for a bottom-up TAM; cross-check with industry report totals for a top-down anchor.

Q: How large must a SAM/SOM be to pursue venture funding?

Aim for SAM in the hundreds of millions and SOM that can plausibly reach $10M+ ARR within a few years; use the provided adequacy thresholds as guidance.

safe

/bundles/startup/skills/market-sizer

This skill helps you size markets using bottom-up and top-down analyses to validate opportunity and guide investment decisions.

npx playbooks add skill shipshitdev/library --skill market-sizer

Review the files below or copy the command above to add this skill to your agents.

Files (3)

SKILL.md

3.3 KB

---
name: market-sizer
description: Use this skill when users need to calculate market size (TAM/SAM/SOM), assess market opportunity, validate market potential, or determine if a market is big enough to pursue. Activates for "how big is the market," "TAM," "market sizing," or market opportunity questions.
version: 1.0.0
tags:
  - business
  - hexa
  - market
  - tam
  - sam
  - som
  - sizing
  - opportunity
auto_activate: true
---

# Market Sizer - TAM/SAM/SOM Calculator

## Overview

Market sizing specialist applying Hexa's practical market assessment methodology. Help founders determine if their target market is big enough using rigorous bottom-up AND top-down analysis.

**Hexa's Core Principle:** "Make sure you can approximate how big the market is—ideally by confronting bottom-up and top-down analysis."

## When This Activates

- "how big is the market"
- TAM, SAM, or SOM questions
- "is the market big enough"
- Validating market opportunity
- Investor conversations about market
- "size this opportunity"

## Core Definitions

| Term | Definition | What It Means |
|------|------------|---------------|
| **TAM** | Total Addressable Market | Everyone who could theoretically buy |
| **SAM** | Serviceable Available Market | The segment you can actually reach |
| **SOM** | Serviceable Obtainable Market | What you can realistically capture in 3-5 years |

## The Framework: Dual-Analysis

**Market Size = Bottom-Up Analysis + Top-Down Analysis + Timing Assessment**

### Bottom-Up (Build from Units)

```
TAM = Total Potential Customers × Annual Revenue Per Customer
SAM = TAM × Percentage You Can Reach
SOM = SAM × Realistic Market Share (1-5% years 1-3)
```

### Top-Down (Start from Industry)

Start with industry reports, narrow to your slice.

**Common Sources:** Gartner, Forrester, Statista, IBISWorld, CB Insights

## Market Size Adequacy Test

| Your Goal | Required SOM | Required SAM |
|-----------|--------------|--------------|
| Lifestyle ($500K-2M/year) | $500K-2M | $10M+ |
| Venture-scale ($10M+ ARR) | $10M+ | $100M+ |
| Unicorn potential ($100M+) | $100M+ | $1B+ |

**The 10% Rule:** If you captured 10% of SAM, would that be interesting?

## Sanity Check

The two methods should be within 2-3x of each other.

| Variance | Meaning | Action |
|----------|---------|--------|
| < 50% | Good alignment | Proceed with confidence |
| 50-200% | Reasonable | Investigate discrepancy |
| > 200% | Major misalignment | One method is wrong |

## Market Stage Assessment

| Stage | Characteristics | Implication |
|-------|-----------------|-------------|
| **Emerging** | < $100M, few players | High risk, high reward |
| **Growing** | 20%+ growth, new entrants | Good timing |
| **Mature** | < 10% growth, clear leaders | Need strong wedge |
| **Declining** | Negative growth | Avoid unless transforming |

## Integration

| Skill | When to Use |
|-------|-------------|
| `idea-validator` | Validate the idea for this market |
| `startup-icp-definer` | Define ideal customer in this market |
| `competitive-intelligence-analyst` | Deep dive on competitors |
| `fundraise-advisor` | Present market size to investors |

---

**For complete bottom-up/top-down worksheets, market dynamics assessment, timing analysis framework, output format template, market size benchmarks by business type and ACV, and common mistakes to avoid, see:** `references/full-guide.md`

Overview

This skill calculates market size (TAM, SAM, SOM) and assesses whether a market is worth pursuing using a practical dual-analysis approach. It combines bottom-up unit economics with top-down industry data and applies timing and stage tests to judge opportunity quality. The output highlights key assumptions, sanity checks, and investor-oriented thresholds.

How this skill works

It runs a bottom-up build from customer counts, conversion rates, and average revenue per customer to estimate TAM, SAM, and SOM. It cross-checks those numbers with top-down industry figures from common research sources and applies timing and stage heuristics (emerging, growing, mature, declining). Finally it runs adequacy and variance tests to flag alignment issues and recommend next steps.

When to use it

You want a concrete TAM/SAM/SOM estimate for a pitch or decision.
Validating whether a market is big enough for lifestyle, venture, or unicorn goals.
Preparing investor materials that require market sizing rationale.
Assessing product-market fit potential in a new segment.
Comparing bottom-up forecasts against industry reports to find gaps.

Best practices

Do both bottom-up and top-down analyses and reconcile differences (aim for <3x variance).
Document core assumptions: addressable customers, ARPC (average revenue per customer), reach percentage, and realistic market share over 3–5 years.
Use credible industry sources (Gartner, Forrester, Statista, IBISWorld) for top-down anchors.
Apply the Market Size Adequacy Test: map SOM and SAM to your business goals (lifestyle, venture-scale, unicorn).
Run sensitivity checks across optimistic, base, and conservative scenarios to see range of outcomes.

Example use cases

Founder preparing a pitch: produce TAM/SAM/SOM with assumptions and investor-friendly thresholds.
Early-stage startup deciding whether to pursue a niche segment or expand.
Investor performing quick diligence on a target’s market claims.
Product manager prioritizing features by market segment size and capture feasibility.
Strategy lead comparing markets to choose geographic or vertical expansion.

FAQ

What’s the simplest way to estimate TAM?

Multiply total potential customers by annual revenue per customer for a bottom-up TAM; cross-check with industry report totals for a top-down anchor.

How large must a SAM/SOM be to pursue venture funding?

Aim for SAM in the hundreds of millions and SOM that can plausibly reach $10M+ ARR within a few years; use the provided adequacy thresholds as guidance.