The TAM, SAM and SOM are the three most important market subsets to understand in commercialization.
The Office of Partnerships and Technology Transfer begins cohort 2 of the Entrepreneurship and Commercialization Practicum on July 9, and it will help new scientist-entrepreneurs think critically about what dynamic barriers exist to market entry, how they can adjust their customer hypotheses, and how their innovation can get a piece of the industry pie.
Inventors typically think their invention can capture 90% of the total market, available everywhere and without competition. The inventor’s instinct is, “everyone should want this!” In contrast, the short-term target is ultimately the one that matters most: the obtainable fraction of the available market.
Back in the early 2000s, there was a product so cutting edge that legendary innovators like Steve Jobs and Jeff Bezos promoted it as something everyone would want. After two years, though, less than 10,000 units were sold of the Segway, a product that was going to be as “big a deal as a PC.” Now it is only used by very small niche markets such as tour guides, law enforcement and warehouses. The lesson? Launching new products and services is risky—very risky.
Understanding TAM, SAM and SOM and why they matter are useful tools in building timelines and presenting useful information to investors:
TAM, Total Available Market: the universe of demand for a product or service.
SAM, Serviceable Available Market: the segment of the TAM targeted by your products and within your geographical reach.
SOM, Serviceable Obtainable Market: the portion of the SAM you can reasonably capture.
In module 7 of the practicum, Market & Competitor Analysis, students will assess TAM, SAM and SOM subsets of potential markets and how to position a startup for success.
Register for the eight-week course at: https://indico.fnal.gov/e/OPTTPracticum2020
Seats are limited.
Questions? Contact Laura Rogas, lrogas@fnal.gov.