TAM

Total Addressable Market

If you created a perfect version of your product, made it available for free, and were able to inform every person on earth about the product, using perfectly crafted marketing materials that make the benefits and value perfectly clear, at the same moment that all of your competitors disappeared from the face of the earth, then how many people would become your customers? This technique may also require you to approximate each customer as a frictionless sphere in a vacuum.

While it is not useful for predicting your revenue it is a good thinking tool for separating out different markets. For example the TAM of a hair-loss cure is obviously different to the TAM of a specialty glue for model plane enthusiasts.

But many niches with a tiny TAM will be large enough to support the humble goals of a micro-ISV building their first product.

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