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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 companion Jahanvi Sardana has a reminder for all these founders frightened about discovering TAM for his or her services or products: many startups have emerged from markets that, on the time, have been primarily 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 programs earlier than Microsoft, or the marketplace for cloud earlier than Amazon?”
Sardana compares TAM to browsing. Each few years, there are large waves founders should journey — first got here the web, then the cell wave, then the cloud, and now, she stated, the most important wave of all: synthetic intelligence.
“Have you ever formed the precise product to journey this wave?” she continued. “That’s what we name product market match.”
Which TAM bucket are you in?
Sardana locations TAM into three buckets: recognized market, rising market, and invisible market.
The primary, recognized market, already exists, and it’s when a founder seeks to exchange 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. “You need 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 may be potential for it to go mainstream.
“Take into consideration non-alcoholic beer earlier than it turned cool,” Sardana stated.
Then there may be the invisible market, which Sardana calls “the most important entice,” and “additionally slightly little bit of a darkish artwork.”
The market doesn’t exist, and a founder has to primarily create the one and supply traders with proof of how revolutionary they are often.
“Take into consideration smartphones in 2006, no person knew they needed them they usually modified the world,” she stated, later including that “individuals don’t know what they’re searching for and typically you need to present them what’s attainable.”
The viewers at All Stage, a lot of whom are early-stage founders, peppered Sardana with questions, largely about what traders wish to see. For 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 irritated when founders rely an excessive amount of on trade metrics relatively 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 simply too depending on an exterior service to dictate how they give thought to the market, it might sign that they haven’t thought deeply in regards to the market they’re making an attempt to construct in, she commented.
“How do you measurement the TAM within the marketplaces, particularly huge 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 an entire new stock, which is now larger than among the largest lodge manufacturers, and that led to an enormous change in conduct on how individuals journey,” she stated, including that market TAMs are difficult. “You wish to give attention to, once more, what’s unlocking provide, and when you unlock the availability, how will conduct 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. In the end, if a founder can perceive who the shopper is and why they’re keen to buy their product, then an organization shouldn’t have any downside standing as much as traders, she added.
“We’re within the enterprise of evaluating founders greater than markets or merchandise or anything,” she stated. “Whenever you speak about your market, it’s actually a lens in your ambition.”
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