Burn Rate vs SOM
Burn Rate (Monthly Cash Burn) and SOM (Serviceable Obtainable Market) both come up in business conversations and get confused. Here's the plain-English difference, side by side, so you can use each one with confidence.
The key difference: Burn Rate refers to monthly cash burn, while SOM refers to serviceable obtainable market — they describe different things even when they show up in the same sentence.
Burn Rate — Monthly Cash Burn
How much cash you lose each month. Burn determines runway more than revenue.
SOM — Serviceable Obtainable Market
What you can realistically win this year. SOM is not wishes — it's execution.
When to use Burn Rate
Reach for "Burn Rate" when the conversation is specifically about monthly cash burn. How much cash you lose each month. Burn determines runway more than revenue.
When to use SOM
Reach for "SOM" when the conversation is specifically about serviceable obtainable market. What you can realistically win this year. SOM is not wishes — it's execution.
FAQs
What is the difference between Burn Rate and SOM?
Burn Rate stands for Monthly Cash Burn — How much cash you lose each month. Burn determines runway more than revenue. SOM stands for Serviceable Obtainable Market — What you can realistically win this year. SOM is not wishes — it's execution.
Are Burn Rate and SOM the same thing?
No. They're often used in the same conversation because they're related, but they describe different concepts. Burn Rate = Monthly Cash Burn. SOM = Serviceable Obtainable Market.
When should I use Burn Rate vs SOM?
Use Burn Rate when you're specifically referring to monthly cash burn. Use SOM when the topic is serviceable obtainable market.