Avoid the TAM Trap

TAMs mean nothing. If you are an entrepreneur building a company that is still below the series B stage (less than 10mn in revenue), even though everyone will repeatedly keep asking you about your TAM, don't start drinking that kool-aid.

TAMs are awesome. They are nice big numbers and investors love them, but it isn't very strategic or tactical for early stage.

Focus on the SOM. The market that you are trying to crack into needs to have a way-in and one that you can crack in as an early stage company.

• SOM: serviceable, obtainable market

Every GTM has a cost. At some point you need to find the market that is accessible to you and probably has commonalities with the market you want to grow into (so that you can have some partial references to cite).

But the SOM is a more practical metric for early stage founders. It's not sexy. Most investors will hear that number and might even say "oh that's not a fundable market."

But when you find the right investors who get you, you wouldn't have to convince them about it. In my nearly 20 years of working with startups, what I have seen over and over again is that when the investor has spotted an opportunity, they almost never need to be convinced about market size. In quite a few cases I've seen the analyst teams of venture funds dive much deeper and show you TAMs much bigger than you would have thought.

Also let's be honest. Talk to any company that has been successful and they have a story of entering a space, where they thought they could build a decent business and then they edged a bit up, a bit down, a bit sideways and suddenly found a vein that scales. If you could spot billion dollar opportunities on day one, every corporate venture fund would be churning successes.

Disruption doesn't announce itself in market research numbers before it shows up. You need to get in and stir things a bit. So start. And don't forget to stir.