Market sizing and TAM/SAM/SOM analysis for AI product categories

Step 1 (TAM): Use a top-down approach. Find a report on the global collaboration software market ($X billion).,Step 2 (SAM): Filter TAM by your target segment (e.g., knowledge workers in English-speaking countries using Zoom/Teams, ~Y million users) and a comparable annual price ($Z/user/year).,Step 3 (SOM): Estimate a 3-5 year capture rate (e.g., 0.5% of SAM) based on competitive analysis and initial traction. Document all assumptions clearly.

Step 1: Define the unit economics: Number of addressable CNC machine shops (use NAICS code data), average number of machines per shop, and your SaaS price per machine per month.,Step 2: Build the SAM: (Number of shops) x (avg. machines) x (price) x (12 months). Adjust for shops with existing legacy systems (a penetration discount).,Step 3: Construct the SOM: Incorporate a sales funnel model (leads -> trials -> conversions) and a realistic sales cycle length. Calculate annual recurring revenue (ARR) for years 1-3.,Step 4: Sensitivity analysis: Model how changes in price, conversion rate, and average machines per shop affect SOM. Present a range, not a single number.

Step 1: Decompose TAM using value-theory: Calculate the total annual spend on healthcare IT and clinical process inefficiencies (e.g., time spent on documentation, billing, prior authorization). Assign a fraction of that spend to tasks addressable by generative AI.,Step 2: Define the SAM through a 'lens of feasibility': Segment by use-case (clinical notes, patient triage, medical imaging analysis), organization size (large hospital systems vs. clinics), and regulatory readiness (HIPAA-compliant environments).,Step 3: Model the SOM dynamically: Align capture rate with your platform's feature roadmap. Phase 1 (Year 1-2) targets a specific use-case (e.g., radiology report drafting) in early-adopter institutions. Phase 2 (Year 3-4) expands use-cases and customer segments. Use cohort analysis to project expansion revenue.,Step 4: Integrate with strategic metrics: Tie market size to required sales/marketing investment, customer acquisition cost (CAC), and lifetime value (LTV). Present the decision as an ROI calculation against alternative verticals.