Is economic and geopolitical volatility affecting your startup’s TAM? • TechCrunch

Startups and theirs investors love to talk about big markets and how they are going to handle them. Total addressable market, or TAM, refers to the dollar value of what a startup wants to sell to a specific population. If you make a widget that plugs into a browser, your TAM might be the total number of users of that browser, minus the fraction using your technology, multiplied by the annual value of that usage.

For startups pursuing a new or emerging market, TAM can be a very bullish metric. A growing market will have plenty of room for startups to attack incumbents; sometimes startups create their own marketplace, but that’s a bit rarer. (A big TAM doesn’t always lead to big success, and small TAMs can still lead to big companies that can reap big margins depending on customers.)

All of this means that TAM is important for startups in how they pitch to investors and how investors make investment decisions. It’s super critical. We have written about it TechCrunch has been around a lot over the years. And I think that it is also a little insufficient today.

I believe that if the macroeconomic environment deteriorates as much as some fear, the TAM question for startups will be more like reading tea leaves than making realistic predictions, especially for those who are busy selling their products just to prove it. that the market exists for what. they build.

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