“We are going after a $50B market” sounds impressive on a slide. To an investor it is a headline, not a market size, because nothing on the slide shows how the number was reached.
This is a step-by-step guide to replacing it with a bottom-up market size an investor can check. (For a quick before-and-after example, see Stop Showing Investors Three Circles.)
The usual slide: three circles, three big numbers, no maths
TAM $50B, SAM $8B, SOM $400M. Each number invites a question the slide does not answer:
- TAM: says who?
- SAM: why this slice?
- SOM: why this share?
Quick to make, hard to believe.
The fix: build it bottom-up
Buyers (how many) × price (per year) = a market you can check. Every input is a number you can defend on its own.
Step 1: Name exactly who buys
A specific buyer makes every number after it checkable. Not “small businesses”. Not even “healthcare practices”. Instead: “independent dental clinics in the US with 3+ chairs”.
Step 2: Count them and cite the source
One number, with one source line under it. For example, 40,000 clinics, sourced from an industry association, government data or your own list, with the year.
Step 3: Use the price you actually charge
Use the annual value from real customers or pilots, not a list price nobody has paid yet. If customers pay $6,000 per clinic per year, use $6,000, even if you hope to charge $15,000 one day.
Step 4: Multiply, then show what you can reach first
40,000 × $6,000 = $240M. Then show the share you can realistically reach, for example 5% in three years, or $12M. Then say why that share is realistic: your channel, your team, your first customers.
$240M is far smaller than $50B. It is also far more convincing, because an investor can follow every step.
Design: make the maths readable in 10 seconds
- The title states the answer. “$240M market: independent US dental clinics”, not just “Market”.
- The formula is the hero. Clinics × price = market, big enough to read at a glance.
- One source line. Small, but always there.
- Circles are optional. If you keep them, keep them small.
Before you send it: the market slide check
- Could a stranger redo the maths?
- Does every number have a source?
- Is the price one customers actually pay?
- Does the title state the answer?
- Do you explain the share you can reach?
All numbers in this article are illustrative. See also Why Most TAM Slides Fail.
Want a second pair of eyes on your market slide? Send your deck for a free deck review and we will show you what to fix first.