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Market sizing analysis is a technique used to estimate the potential size of a market in terms of volume or value. This process is crucial for startups to understand the potential for their product or service and to justify their business model to investors.
The process of market sizing typically involves identifying the total available market (TAM), the serviceable available market (SAM), and the serviceable obtainable market (SOM). These measurements help a startup understand the total market size, the portion of the market they can realistically serve given their capabilities, and the portion of the market they can realistically capture given their specific value proposition and competition.
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