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Framework to breakdown TAM, SAM, and SOM using a New Dog Owner startup as an example.
Read more here: https://medium.com/@frankflitton/will-my-startups-problem-be-big-enough-402eb518d46f
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Market BreakdownBusiness Models
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Total Addressable Marketnumber sales/yr% of marketvalueSale typeAmount$/yr
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sales/yr450,000100%New Dog SOM
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avg. spend$1,700% per sale5%$2,267,919
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amount/sale$5$133,407
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TAM Total450,000100%$765,000,000
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Dog Maintenance SOM
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Service Addressible MarketAverage lifetime cost of dog$25,000
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Dogs not obtained for free75%Cost of dog in first year20%$5,000
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Dogs advertised online90%Annual dog cost$350
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SAM Total303,75068%$516,375,000
Dog Maintenance SOM for new dogs
$133,407,000
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Dog Maintenance SOM for existing dogs
$9,338,490
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Service Obtainable Market
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SOM, Step 1: Sales channels, sum
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Dogs obtained through breeders29%
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Dogs obtained through shelters7%
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SOM Step 1: sub-total109,35036%$185,895,000
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SOM Step 2: Demographics, multiply
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Dog owners earning more than $100K
40%
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Designer/Pure breeds sold61%
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Toal SOM26,68124%$45,358,380
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