According to the Bureau of Labor Statistics, the median weekly earnings of full-time workers in the United States was $990 in the fourth quarter of 2021. Assuming someone works 52 weeks in a year, this would equate to an annual income of approximately $51,480.
If we use this figure as a benchmark, it is likely that a small percentage of the population (perhaps around 10-20%) would be able to comfortably afford a $1500 basketball training program without it significantly impacting their overall budget. However, it's important to note that this is just an estimate and individual financial circumstances can vary widely.
According to this research, over 70% of basketball fans are unable to afford the $1,500 fee for in-person training with a coach.
The total addressable market is the total number of potential customers for a product or service. For the global app providing a subscription for basketball training for $59/year, the TAM would be the total number of basketball players worldwide who have access to a smartphone or computer and could potentially be interested in the product.
Total number of basketball players worldwide: 500M
Premium subscription for basketball training: $59/year
The serviceable available market is the portion of the total addressable market that can realistically be reached and served by a particular product or service. For the basketball training app, the SAM would be the subset of the total addressable market that has a need for the product and can afford to pay for it. This could include players who are looking to improve their skills but may not have access to a coach or a training facility.
% of basketball players who can’t afford training with a coach = 70%
Global TAM = $30B
The serviceable obtainable market is the portion of the serviceable available market that a company can realistically capture given its resources, competition, and other factors. For the basketball training app, the SOM would be the subset of the serviceable available market that the app can realistically capture through its marketing efforts, pricing, and other strategies. The SOM would depend on several factors, such as the quality and uniqueness of the app, the strength of its marketing campaigns, and the level of competition in the market.
Our focus is the US market with 26M basketball players, which is 26/500 = 5.2% of the global market.