TAM SAM SOM: how to size your market for a pitch deck

ISTAT counted 32,943 hotels in Italy in 2024, and Eurostat’s tables carry the very same number. Multiply that by what one hotel would pay you in a year and you have the start of a market slide an investor can check in ten seconds. Most market slides go the other way: a giant figure from a research firm, then a claim on a small slice of it.

This guide walks through TAM SAM SOM the way an investor reads it, with one worked example on Italian hotels from start to finish. By the end you’ll be able to build all three numbers from official counts and defend each of them in a meeting. New to fundraising? Start from the beginner’s map, from zero to a first round.

TAM SAM SOM: what each one means

Think of a dartboard: TAM is the outer ring, SOM the bullseye, SAM the band in between. Our glossary entry on TAM, SAM and SOM has a two-line version. What follows is what an investor expects you to know cold.

TAM, the total addressable market, is the revenue per year if every customer who could buy a product like yours bought it from you. Treat it as a ceiling. It isn’t a forecast.

SAM, the serviceable available market, is the slice of the TAM your product, language and sales channels can reach today. Software that only works in Italian has its SAM in Italy, however big its TAM.

SOM, the serviceable obtainable market, is the part of the SAM you can actually win over a stated period, usually three to five years. It’s the number investors push on hardest. It should match your sales plan and your hiring.

All three are amounts per year, in one currency. In B2B, selling to businesses rather than consumers, you can also count them in customers, one by one.

Top-down vs bottom-up market sizing: which do investors trust?

Top-down starts from an industry total and takes a share of it. Bottom-up starts from the customer. How many exist, and what would each pay you?

Top-down is easy to get wrong. In January 2026 the Osservatorio Travel Innovation of Politecnico di Milano put the Italian accommodation market at €38.7 billion for 2025. A serious figure, and the wrong one for most startups: it’s what guests spend on rooms. If you sell software to hotels, your customers are the hotels, and their software budget is a far smaller pot. Put €38.7 billion on the slide and the investor learns you haven’t decided who pays you.

Michael Seibel of Y Combinator asks for the opposite route: find where comparable products are sold, how many of them, and what share you could take. ‘I prefer the bottom up method because it helps you avoid a common top down pitfall, which is not narrowing down the customer enough.’ His example is Bellabeat’s activity tracker for women, where the trap is counting every woman, whatever her age or country.

Top-down can also miss the other way. In June 2014 Aswath Damodaran, a finance professor at NYU Stern, valued Uber at $5.895 billion, giving it 10% of a $100 billion global market for taxis and limos. Bill Gurley, Uber’s Series A investor, answered a month later that Uber was growing the market: in San Francisco alone it already looked ‘potentially 3X the original’. Sequoia’s guide to business plans says it in one line. ‘Some of the best companies invent their own markets.’ Think yours will? Bring data, the way Gurley did.

How to calculate TAM, SAM and SOM: a worked example

Say you’ve built software that sets hotel room rates every day from demand and from competitors’ prices, and you want €250 a month for it. Call it €3,000 a year per hotel. That price is an assumption, and your first sales calls should test it (see how to validate a startup idea in 7 days).

Now the counts, all official and all for 2024. Eurostat lists 162,375 hotels and similar establishments across the EU. ISTAT lists 32,943 in Italy. Leave out the 232,376 extra-hotel places, from campsites to holiday flats and B&Bs, unless your software makes sense for a three-room B&B.

	Who you count	How many	At €3,000 a year	Source
TAM	Hotels and similar establishments in the EU	162,375	About €487 million	Eurostat, 2024
SAM	Hotels in Italy, where your product and team work today	32,943	About €98.8 million	ISTAT, 2024
SOM	Hotels you can sign within three years (see below)	504	About €1.5 million	Your sales plan

Does the product only pay off for upmarket hotels? Then narrow the SAM again. Federalberghi, the hoteliers’ association, counts 7,410 four- and five-star hotels in Italy, which brings the SAM down to €22.2 million. A smaller number, and a much easier one to defend.

How big can your SOM honestly be?

Your SOM is your go-to-market plan turned into numbers: who you sell to first, through which channel, how fast. That means counting salespeople and months, not picking a percentage.

Back to the hotels. You open with two salespeople and add two more at the start of years two and three. Each closes four hotels a month once their pipeline is full. A deal takes three months from first call to signature, so a new hire signs nothing in their first quarter. Year one: 2 × 4 × 9 months, 72 hotels. Year two adds 168, year three 264. Total, 504 hotels and about €1.5 million of annual recurring revenue by the end of year three, before any hotel cancels.

That’s about 1.5% of the SAM. Close to the bonus entry in Guy Kawasaki’s 2006 list of the top lies of entrepreneurs: ‘All we have to do is get 1% of the market.’ The difference is direction. Here the percentage comes out of the sum instead of going in as a wish, and every input can be argued with in the meeting: four deals a month, three months to close, two hires a year.

Those salespeople must turn up elsewhere in your deck too. Their salaries belong in your use of funds, their deals in your startup financial model, and their cost per signed hotel in your CAC and payback maths. A SOM of 504 hotels with no sales hires in the budget won’t survive the first question.

Where to find market data in Italy and abroad

Official counts first, associations second, analysts last. In Italy:

• ISTAT: the yearbook and IstatData for counts by sector and region, and the register of active enterprises (ASIA) by sector and size class, whose 2023 edition came out in July 2025.
• Movimprese, the quarterly report from Unioncamere and InfoCamere on the Registro Imprese: 5,823,863 registered businesses at 30 June 2026, by ATECO sector and province.
• Trade associations. The hotels-by-star count above is Federalberghi’s, and most sectors have an equivalent.
• Politecnico di Milano’s Osservatori Digital Innovation, for market values. Good context, rarely your TAM.

Abroad, Eurostat covers every EU country: about 34 million enterprises were active in the EU business economy in 2024, by sector and size class. In the US, the Census Bureau’s County Business Patterns counts establishments in nearly 1,000 industries, down to ZIP code level. The UK’s ONS counted 2.79 million VAT or PAYE businesses in March 2026.

And Statista? Fine for a first look. Statista says it builds ‘proprietary data models for each market’, and that modelled data ‘approximates but does not reflect reality’. When one of its charts hands you a number, find the source behind it, or tell the investor it’s a model.

Market sizing mistakes investors spot in seconds

• The 1% shortcut. Kawasaki’s verdict: ‘no venture capitalist is interested in a company that is looking to get 1% or so of a market.’
• A consulting firm’s headline with no trail. His advice was to drop ‘any reference to market size estimates from consulting firms’ altogether.
• Dollars and euros on one slide, from different years, like a 2021 American report quoted next to a 2025 Italian one. Convert at a stated rate and bring everything to the same year, or someone in the room will do it for you.
• Counting what guests spend when your customer is the hotel.
• A SOM with nobody to sell it. If the hires aren’t in the plan, neither is the SOM.

Market size for a pitch deck: how to show it on one slide

DocSend, which tracks how investors read decks, says they now spend less than three minutes on a whole deck. Your market slide gets seconds. Kevin Hale’s rule from Y Combinator fits it: ‘A simple slide, therefore, expresses one idea.’ Here the idea is that the market is big enough and you know exactly who pays.

Two layouts work. Three nested circles, TAM on the outside and SOM in the middle, each with its amount. Or a three-row table like the one above. Either way, put the sum and the source in small type under each number, for example ‘32,943 hotels × €3,000 · ISTAT, 2024’. Where the slide sits in the deck is covered in our guide to pitch deck structure.

Don’t ask this slide to carry the round. At pre-seed and seed, what you’ve already proven usually weighs more, so check the startup metrics investors want at pre-seed and seed before you polish the circles. Want a layout to start from? Our pitch deck template (14 slides, €19, on our Resources page) has a market slide with a note on what goes there and the slip that most often costs founders the meeting.

Checklist: your market slide before you send the deck

1. Write one sentence on who pays you: the type of business, its size, the country.
2. Find an official count for that customer (ISTAT, the Registro Imprese, Eurostat or an association) and note its year.
3. Take the price from real customer conversations, not only from a competitor’s website.
4. Multiply for TAM and SAM. One currency, one year.
5. Build the SOM from your salespeople, your sales cycle and your hires, then check it against the financial model.
6. Put the source under every number.
7. Read the slide aloud. Over twenty seconds? Cut.