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This reminds me of how venture capitalists will sometimes ask founders about their TAM, or "total addressable market". The TAM is basically the amount of money
by dcurtis 17y ago
This reminds me of how venture capitalists will sometimes ask founders about their TAM, or "total addressable market". The TAM is basically the amount of money you would make if every single eligible human being on Earth purchased/consumed your product.
I will never forget one night I was with a friend and he calculated his TAM to be something like 940 billion dollars. For his web startup.
After calculating this number, he said "Wow, if only 1%..."
- sachinag 17y agoA VC (or anyone else) who cares more about the number than how you calculated it is a moron.
- radu_floricica 17y agoYou calculate it to make sure it's not a small number. Anything above "small" doesn't matter, but you want to make sure you don't work a year to sell a $19.99 app to a maximum of 500 companies. Happened to me once... after half a year of development we realized the total grand market for the app, in the form we built it, was 5 (five) companies. Wasn't as stupid as you't think, we found over 100 companies listed when we first did research. Only when we started actually selling we realized how many were big enough, still in business and close enough to actually make use of what we offered. We got 60% of the market, btw.
- ryanwaggoner 17y agoWe got 60% of the market, btw. That's how you represent this accomplishment on a resume :)