XT Monthly Newsletter: Scaling Success, Driving Innovation, and Announcing an Investment in Mellie

In this edition, we're excited to share our new partnership with Mellie, a company making a real difference in caregiving. This month, we also explore the importance of building strong sales structures and effective hiring strategies in our XT Lens series. Additionally, we’ve introduced a new feature that spotlights the founders of our portfolio companies, starting with NeuReality's Moshe Tanach. Plus, dive into key metrics like TAM, SAM, and SOM, and celebrate the successes of companies like Cymbio and Sofwave.

Stay tuned for more insights and updates as we continue to support exceptional teams.

Starting this edition of the newsletter with an exciting announcement!

We've partnered with Mellie , a dynamic company led by Zvika Goldstein, Tal Hasson, and Chad Baldwin. Their innovative approach to caregiving is exactly what drew us in, and we see incredible potential in their standout product. This partnership is just the beginning of something special, and we’re eager to support Mellie in making a significant impact in the caregiving sector.

We can’t wait to see what’s next.

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XT Lens: What’s Driving VC Decisions

Part 3: The Optimal Sales Structure?

In Part 3 of our XT Lens series, we wrote about the importance of designing the optimal sales structure for startups. This post highlights the key strategies that align with business models and market demands and provides insights into building a sales force capable of scaling with growth and adapting to unique challenges.

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XT Lens: What’s Driving VC Decisions

Part 4: Hiring?

In Part 4 of this series, we focused on the critical importance of hiring in startups. Beyond just competency, the right team must align with the startup's vision, adapt to changing conditions, and scale as the company grows. We wrote about how VCs evaluate founding team dynamics, alignment with the mission, adaptability, and scalability.?

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The Metric of the Month: TAM, SAM, and SOM

Evaluating your startup’s market potential or planning its growth is possible by understanding and applying TAM (Total Addressable Market), SAM (Serviceable Available Market), and SOM (Serviceable Obtainable Market) calculations.

TAM Calculation: TAM = Total Number of Potential Customers × Average Revenue per Customer

TAM represents the entire revenue opportunity if your startup captures 100% market share in its industry.?

Example:

Let’s say you have a B2B SaaS startup that offers a CRM tool specifically optimized for mobile devices, mostly tablets and smartphones of financial institutions. In this example, SAM is the total amount spent annually on CRM solutions by financial institutions that prefer using mobile devices.

SAM Calculation: SAM = All Potential Customers in Your Target Market × Average Revenue per Customer

SAM narrows this down to the portion of TAM that you can realistically target. The realistic side of SAM is based on variables such as location, regulations, and your business model.?

Example:

In the case of the B2B SaaS startup that offers a CRM tool specifically optimized for mobile devices, SAM is the total amount spent annually on CRM solutions by financial institutions that prefer using mobile devices.

SOM Calculation: SOM = (Last Year’s Revenue/Last Year’s SAM) × This Year’s SAM

SOM is even more focused. It identifies the share of SAM you can realistically capture in the short term.?

Example:?

Following the same B2B SaaS startup providing a mobile-only CRM tool example, SOM targets financial institutions that actively use mobile devices for their daily client interactions and need a CRM solution that is fully integrated with their mobile workflow.

To calculate these metrics, you need to:

??Multiply the average annual revenue per customer by the number of potential customers per segment.

Why would you do this?

TAM, SAM, and SOM metrics help you understand total and specific market potential, set your startup goals, and create plans to reach these goals. It also helps raise as it helps investors get proof of potential revenue. Ultimately, TAM, SAM, and SOM are specific tools for startups looking to understand their market and growth potential.

In this month's newsletter, we’re excited to introduce a new series where we spotlight the founders of our portfolio companies. Our first feature is Moshe Tanach , co-founder and CEO of NeuReality , a pioneering AI startup. NeuReality is transforming AI inferencing with its innovative NR1 AI Inference Solution, making AI faster, more affordable, and energy-efficient. Moshe shares his insights on the challenges of founding NeuReality and their mission to make AI accessible to all industries.

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Summer is the ideal time to strengthen the bond between brands and retailers. Cymbio highlights how evolving relationships can become a game-changer this season, emphasizing the importance of timing and strategy.

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Kudos to Sofwave on their impressive Q2 2024 results! With an 83% year-over-year growth in recurring revenue, Sofwave continues to show the strength of its business model and the rising demand for its innovative technology. The dedication of their Practice Development Managers and a focus on execution and brand awareness are key drivers of this success.?

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Stay Tuned

Watch out for more updates and stories in our upcoming edition.

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