Market sizing puts a number on the prize, in three nested circles. TAM — total addressable market — is everything that would be spent if you served the entire category. SAM — serviceable addressable market — narrows to the part you could actually serve given your model, geography, and channel. SOM — serviceable obtainable market — is the slice you could realistically win in a given period against real competition. Each circle sits inside the last.
There are two honest ways to build the estimate, and the discipline is to do both. Top-down starts from a published category total and carves it down by segment and reach. Bottom-up starts from units — customers reachable × price × frequency — and builds up. When the two converge, you have a number you can lean on. When they diverge wildly, the gap is the finding: one of your assumptions is wrong, and now you know which kind.
“We want to do $100M” is not a goal until it says what share of what market that is. Often the number, spoken aloud as a share, answers itself.
Read a sizing not for the headline TAM — TAM is almost always large and almost always misleading — but for the SOM and the implied share. The useful question is always: what share of the serviceable market does this plan require, and has anyone ever held that share? A plan that needs 40% of a fragmented category in three years is telling you something a confident slide won’t.
The structural value of sizing is that it forces an ambition to declare its market definition. A goal that looks reasonable against one market looks absurd against a narrower one — and the right move is often to redraw the boundary. This is exactly the hinge in the locksmith work: $100M is about 3% of the core locksmith category but a rounding error of the broader door-access-and-security market. The size of the prize and the definition of the market are the same decision, and sizing makes you make it on purpose.
That’s the trap sizing exists to catch. Pick a target large enough and you have implicitly committed to leaving the category you’re good at for one you’ve never competed in. Better to see that on the page than to discover it after hiring for the wrong company.
Reach for it when evaluating an opportunity or an acquisition, setting a growth target that needs a reality check, or deciding whether a market is big enough to bother entering. Pair it with Porter’s Five Forces (a big market the forces won’t let you profit in is a trap) and Scenario Modeling (size the prize across base, bull, and bear, not as a single confident number).