Calculate Startup Market Opportunity

This skill provides comprehensive market sizing methodology for calculating Total Addressable Market (TAM - total revenue opportunity at 100% market share), Serviceable Available Market (SAM - the portion of TAM reachable with the current product, after geographic/segment/capability constraints), and Serviceable Obtainable Market (SOM - realistic market share achievable in 3-5 years, typically 2-5% of SAM).

It supports three methodologies. Top-down analysis starts from industry research reports and narrows by geographic and segment filters - best for established, well-researched markets, quick but potentially less granular. Bottom-up analysis builds TAM from customer segment counts times average revenue per customer - best for B2B or niche markets and considered most credible for investors, though more time-intensive. Value theory estimates willingness to pay (typically 10-30% of the value created) multiplied by the addressable customer base - best for new categories or disruptive innovation where no existing market data exists.

SAM = TAM × (% matching all filters)

Example: TAM $10B global email marketing x 40% geographic filter x 30% product filter x 60% feature filter = SAM $720M; Year 3 SOM at 2% = $14.4M, Year 5 SOM at 5% = $36M.

The step-by-step process is: (1) define the market - problem, customers, category, geography, time horizon; (2) gather data sources - industry reports (Gartner, Forrester, IDC) and public filings for top-down, customer interviews/CRM/industry databases for bottom-up, ROI case studies and willingness-to-pay surveys for value theory; (3) calculate TAM with the chosen methodology's formula; (4) calculate SAM by applying geographic, product, customer, and regulatory filters to TAM; (5) calculate SOM as a conservative 2-5% capture rate of SAM over 3-5 years; (6) validate and triangulate - top-down and bottom-up results should land within 30% of each other, and red flags include a TAM under $1B for VC-backed startups, an unsupported oversized TAM, a SOM projection above 10% in 5 years, or over 50% disagreement between methodologies.

It gives industry-specific TAM formulas: SaaS (total target companies x average contract value x (1 + expansion rate)), marketplaces (total category GMV x expected take rate), consumer (total users x ARPU x purchase frequency), and B2B services (total target companies x average deal size x deals per year).

Use top-down when established market research already exists for a mature market. Use bottom-up when targeting specific, well-understood customer segments - it's the most credible for investors and should generally be led with, with top-down shown as triangulation. Use value theory specifically for new market categories or disruptive innovation where no existing market data applies.

Avoid five common mistakes: confusing TAM with SAM by claiming the entire market as addressable rather than applying realistic constraints; an overly aggressive SOM, since new entrants rarely capture more than 5% within 5 years; relying on top-down alone, which investors find less credible without bottom-up validation; cherry-picking inconsistent or stale data sources across methodologies; and ignoring market dynamics like growth/decline, competitive intensity, and switching costs.

Input is the market definition (problem, target customers, product category, geography, time horizon) and the data sources needed for the chosen methodology. Output is a documented TAM/SAM/SOM calculation with methodology, data sources, and assumptions shown explicitly, structured differently by audience: for investors, market definition through TAM/SAM/SOM, data sources/assumptions, growth projections, and competitive context, leading with the bottom-up number and showing top-down triangulation; for internal strategy, addressable segments prioritized by opportunity size, entry strategy, penetration timeline, and resource requirements, focused on SAM/SOM.

Detailed worksheets live in references/methodology-deep-dive.md, references/data-sources.md, and references/industry-templates.md, with complete worked examples in examples/saas-market-sizing.md, examples/marketplace-sizing.md, and examples/value-theory-example.md.

Founders and startup strategists building market-sizing analysis for fundraising or business planning, who need TAM/SAM/SOM figures that are methodologically sound, triangulated across multiple approaches, and structured appropriately for investor or internal-strategy audiences.