If the Total Addressable Market or TAM can be compared to the universe, the Serviceable Addressable Market or SAM would be the number of galaxies in the universe that we can actually reach. In more earthly terms, your SAM would be the proportion of the TAM you can actually reach to provide your services to.
For example…
Paula, a brilliant dermatologist has invented a new kind of spray that can be used to relieve eczema in babies. Even though her TAM would be the entire population of babies under six months in her country, she can’t possibly reach every single one of them. Her Serviceable Addressable Market is limited to the select group of customers who shop at the pharmacies that stock her product and those who have babies under six months. This narrows it down to four cities where her product is currently sold.
