Total Addressable Market

Total Addressable Market (TAM) refers to the total Revenue opportunity available for a product or service if it were to achieve 100% Market Share. It helps businesses understand the ultimate potential of a market.

For instance, if a software company develops a solution for small businesses and estimates there are 1 million small businesses each willing to pay $1,000 annually, the TAM would be $1 billion. A case example is Uber, which calculated its TAM in the ride-sharing market by estimating the total spend on taxis and personal vehicle ownership.