For many first-time founders, determining the size of the market in which they hope to compete is one of their biggest challenges.

I haven't launched a successful startup, but I have helped write several pitch decks. Each time, the team's collective anxiety increased when we needed to calculate TAM.

It was always the last slide we worked on.

For most products and services, TAM is presented in nine figures or more, but when you're sitting around a kitchen table eating cold pizza while planning to disrupt a billion-dollar market, these numbers can create a lot of cognitive dissonance.

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Calculating TAM, SAM and SOM sounds like an existential exercise, but there’s no need to dread it “if you approach market sizing methodically,” says Marjorie Radlo-Zandi, a veteran investor and entrepreneur.

In her latest TC+ post, she broke down the steps required to capture these key metrics that will “show prospective investors how they stand to gain from investing in your company, and put yourself in the best possible position to achieve your goals.”

This article also covers how to hire and pay for custom market research, the best people to ask for advice, and the importance of only using credible sources. And don't worry about those eye-popping, billion-dollar figures.

"Only be concerned if the number is small," she says. "The TAM number gives investors an overall macro perspective of your company’s potential."

Thanks for reading, and have a great weekend.

Walter Thompson
Senior Editor, TechCrunch+
@yourprotagonist

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