The realistic portion of the SAM that a company expects to capture within the next 12 to 36 months, factoring in competition and current sales resources.
Why it matters: SOM represents the immediate revenue goal. It proves to investors that the founders have a pragmatic understanding of their near-term sales capacity.
In practice: If your SAM is $100M, but you only have 2 sales reps who can close $1M each per year, your realistic SOM for the next year is $2M.