Early-stage founders simply can’t get away from TAM — the idea of getting a complete addressable marketplace for their startup to disrupt and conquer. However Index Ventures accomplice Jahanvi Sardana has a reminder for all these founders nervous about discovering TAM for his or her services or products: Many startups have emerged from markets that, on the time, have been basically nonexistent.
“What was the marketplace for search earlier than Google?” Sardana requested the viewers at TechCrunch’s 2025 All Stage occasion in Boston, held earlier this month. “What was the marketplace for working methods earlier than Microsoft, or the marketplace for cloud earlier than Amazon?”
Sardana compares TAM to browsing. Each few years, there are huge waves founders should experience — first got here the web, then the cell wave, then the cloud, and now, she stated, the largest wave of all: synthetic intelligence.
“Have you ever formed the suitable product to experience this wave?” she continued. “That’s what we name product-market match.”
Which TAM bucket are you in?
Sardana locations TAM into three buckets: identified market, rising market, and invisible market.
The primary, identified market, already exists, and it’s when a founder seeks to interchange a legacy incumbent and should show to an investor why their startup thought is healthier.
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“Everybody brushes their enamel,” she stated. “It’s a must to inform me why you’re constructing a greater toothbrush.”
The rising market is when a sure sector of the market is utilizing a product, and there’s potential for it to go mainstream.
“Take into consideration non-alcoholic beer earlier than it grew to become cool,” Sardana stated.
Then there’s the invisible market, which Sardana calls “the largest lure,” and “additionally a little bit little bit of a darkish artwork.”
The market doesn’t exist, and a founder has to basically create one and supply traders with proof of how progressive they are often.
“Take into consideration smartphones in 2006; no person knew they wished them they usually modified the world,” she stated, later including that “individuals don’t know what they’re in search of and typically you must present them what’s doable.”
The viewers at All Stage, a lot of whom are early-stage founders, peppered Sardana with questions, largely about what traders wish to see. As an example, do traders wish to see a TAM slide in a pitch deck?
“It’s OK to create that slide and speak in regards to the math behind your TAM,” Sardana stated, although she added that typically traders get aggravated when founders rely an excessive amount of on trade metrics fairly than having their very own distinctive perception. Sardana additionally cautioned founders to not rely an excessive amount of on trade stories. If a founder is just too depending on an exterior service to dictate how they give thought to the market, it may well sign that they haven’t thought deeply in regards to the market they’re attempting to construct in, she commented.
“How do you dimension the TAM within the marketplaces, particularly massive marketplaces?” one viewers member requested.
“Nicely, that query hurts,” Sardana quipped. In spite of everything, Index as soon as handed on Airbnb, having believed its TAM was too small.
“The truth is Airbnb created a complete new stock, which is now larger than a number of the largest lodge manufacturers, and that led to a giant change in habits on how individuals journey,” she stated, including that market TAMs are difficult. “You wish to concentrate on, once more, what’s unlocking provide, and when you unlock the availability, how will habits change?”
The viewers additionally requested Sardana what makes an organization stand out to an investor like herself.
A tricky one, Sardana stated, however a extremely vital one. Finally, if a founder can perceive who the shopper is and why they’re keen to buy their product, then an organization should not have any drawback standing as much as traders, she added.
“We’re within the enterprise of evaluating founders greater than markets or merchandise or the rest,” she stated. “Whenever you speak about your market, it’s actually a lens in your ambition.”
