Understanding and calculating the Total Addressable Market (TAM) is crucial for businesses exploring new products or services, as it estimates the potential revenue if every company in a target market became a customer. There are three main methods to calculate TAM: using a TAM calculator, the top-down approach relying on secondary industry data, and the bottom-up method based on firsthand data such as surveys. Additionally, the value theory method examines customer insights to determine what they are willing to pay for a product's unique value. Each method has its pros and cons, with varying accuracy and resource requirements. Despite the challenges of calculating TAM, such as the potential costs and time required for in-depth market research, understanding TAM is vital for shaping go-to-market strategies, prioritizing business opportunities, and providing insights for budgeting and resource planning. While TAM offers valuable market insights, it should be used as part of a broader strategy, considering its subjectivity and the dynamic nature of markets. Businesses should regularly revisit their TAM, especially when entering new segments, to ensure it remains relevant and aids in targeting value-generating customers through a well-defined ideal customer profile (ICP).