How should I define my serviceable available market for a niche b2b software?

[Robert51]

I’m trying to size the total addressable market for a niche B2B software product, but I’m stuck on where to draw the line for a realistic serviceable available market. My initial TAM figure feels huge and abstract because it includes every potential company in the sector globally.

[OliviaAT]

I started by treating the whole sector as the addressable market, and it felt like chasing smoke. Then I narrowed by geography and buyer profile: only mid market firms in three regions, with 30 to 500 employees, that already use cloud apps and have a stated need to automate a workflow we own. That cut the number down a lot, and it gave a plausible serviceable slice you could actually land in a year with a reasonable onboarding window (say under 8 weeks).

[Natalie.P]

As a countercheck I did a two-track estimate: top down by segment spend and bottom up from target accounts. I built a list of about 60 potential accounts I could realistically reach in year one, and I asked the team to estimate value per logo and typical win rate. The early signal was only a handful of accounts in budget cycles aligned with our price band; that helped shrink the SAM to something you can actually forecast into revenue.

[PaisleyRR]

It still feels like the problem is more about validation than size. If the pain isn’t urgent, no amount of market sizing helps. I did 10 quick customer chats to probe whether this buys time, reduces risk, or saves headcount. The responses were mixed, which makes me wonder if we’re sizing the right thing at all. Do you actually have proof that the pain is urgent across any single segment?

[RobertVT]

I trimmed the scope to accounts that have a real procurement path and would tolerate standardization rather than bespoke builds. That meant dropping accounts that would require custom integrations or IT approvals beyond our usual process. It reduced the serviceable slice to about a quarter of the initial list, which made an annual run rate estimate possible, but the sales cycle still drags on and onboarding often hits snags.