Market demand
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Skip or Ship — Glossary
Serviceable Obtainable Market
Serviceable obtainable market (SOM) is the share of your serviceable addressable market you could realistically capture within a defined period, given your budget, team, distribution and existing competition.
Competition
How crowded is the space for this exact outcome?
Execution
Can a focused team ship a credible first version quickly?
Revenue path
Is there a believable way to monetize early?
Customer clarity
Do you know exactly who owns this pain day to day?
Market · also known as SOM
Serviceable obtainable market (SOM) is the share of your serviceable addressable market you could realistically capture within a defined period, given your budget, team, distribution and existing competition.
What Serviceable Obtainable Market means in practice
SOM is the only one of the three market figures that should influence your actual plan. TAM tells you whether the category is big enough to bother with; SAM tells you what your model can reach; SOM tells you what you can realistically win with the resources you have, against the competitors already there.
It is grounded in capacity rather than ambition. If your channel can generate 40 qualified conversations a month and you close a quarter of them, your first-year customer count is arithmetic, not aspiration. Working forward from real channel throughput produces a number you can staff and budget against.
SOM is where honest founders and optimistic ones visibly diverge. Assuming a few percent of SAM "because the market is huge" is a red flag to anyone who has tried to acquire customers. Deriving SOM from channel capacity and conversion rates you can point to is the credible alternative.
How it is calculated
SOM = (realistic customers acquired per period) × (annual revenue per customer)Derive the customer count from actual channel throughput and conversion rates, not from a percentage of SAM.
Worked example
Year-one target for the accounting-compliance product, from a £7.1m SAM.
- One working channel: partnership webinars, producing ~35 qualified conversations per month.
- Observed close rate on qualified conversations: 20% → 7 new customers per month.
- Allowing for ramp-up, roughly 60 customers in year one.
- SOM = 60 × £3,600 = £216,000 of annual recurring revenue.
Takeaway: £216k is about 3% of SAM — and because it was derived from channel capacity rather than assumed as a percentage, it doubles as a staffing and budget plan.
Common mistakes
- Picking a round percentage of SAM and presenting it as SOM. It is the least credible number in any plan.
- Ignoring competitors who already hold the customers you are counting.
- Assuming channel throughput scales linearly with spend — most channels saturate.
- Setting SOM over a vague horizon. Without a stated period the figure means nothing.
Related tool: TAM/SAM/SOM calculator.
Related terms
- Serviceable Addressable Market — Serviceable addressable market (SAM) is the portion of total addressable market you could actually sell to given your business model, geography, language, regulation and target segment — TAM minus everyone you structurally cannot serve.
- Total Addressable Market — Total addressable market (TAM) is the total annual revenue available if a product achieved 100% market share of everyone who could conceivably buy it — the theoretical ceiling, not a realistic target.
- Customer Acquisition Cost — Customer acquisition cost (CAC) is the total sales and marketing spend required to win one new paying customer, calculated by dividing all acquisition costs in a period by the number of customers acquired in that period.
Direct answer
The Skip or Ship Idea Lifecycle System evaluates ideas with five consistent signals: market demand, competition intensity, execution difficulty, revenue potential, and customer clarity. Same inputs, same verdict — every time.
What to prove first
One buyer segment with recurring pain and a clear trigger to pay now. If that is vague, validation can't fix it.
What kills momentum
Generic ICPs, vague outcomes, and zero distribution plan. These collapse execution speed within weeks.
What to decide next
One channel, one wedge use case, one pricing hypothesis to test in the next 14 days.
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Frequently asked questions
What percentage of SAM is a realistic SOM?
For a new entrant in year one, low single digits is typical, but the percentage is an output rather than an input. Work forward from how many customers your channels can realistically produce, then check what share that represents.
Why does SOM matter more than TAM?
SOM is the only figure tied to what you can actually execute. It drives hiring, budget and runway planning, whereas TAM only establishes whether the category is worth entering at all.
Related pages
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