Better than TAM SAM SOM 🚀 startup market sizing
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- เผยแพร่เมื่อ 4 มิ.ย. 2024
- Better than TAM SAM SOM 🚀 startup market sizing
Lance Cottrell, host of Feel the Boot, explains the importance of understanding TAM (Total Addressable Market), SAM (Serviceable Available Market), and SOM (Serviceable Obtainable Market) in startup pitches to investors. He emphasizes the necessity for startups to convincingly present their market opportunity in terms of potential revenue to attract angel investors and venture capitalists. The video highlights common mistakes in calculating market size and recommends a bottom-up approach for more accurate and convincing market analysis. This includes starting with a direct focus on the target market and expanding from there, to represent potential growth and market reach more realistically. Cottrell also suggests presenting market analysis in a timeline, moving from launch to expansion and finally to the total market, to provide a clearer picture of growth strategy and potential.
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00:00 Unlocking the Secrets of Market Size in Your Startup Pitch
00:33 Welcome to Feel the Boot: Navigating the Startup Journey
01:09 Why Market Size Matters to Investors
02:29 Decoding TAM, SAM, and SOM: The Basics
04:09 Common Mistakes in Presenting Market Size
05:39 A Real-World Example: The Acme Clothing Company
08:19 The Power of Bottom-Up Analysis for Market Sizing
09:42 Finding the Data: How to Accurately Calculate Your Market Opportunity
14:56 Beyond TAM, SAM, SOM: A More Dynamic Approach to Market Sizing
20:49 Conclusion and Final Thoughts
Lance Cottrell has been an active startup advisor and startup mentor for over a decade.
He has helped countless startups navigate the key decisions of their journey, like when to take venture capital investment and negotiating term sheets.
He works with many companies in accelerators like Y Combinator and Founder Institute.
He provides help with startup funding including raising venture capital and angel investment.
He can help you achieve liquidity for your company at a high valuation.
Feel the Boot is a startup vlog of tips and advice for early-stage founders. - แนวปฏิบัติและการใช้ชีวิต
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The best video I seen for this, thanks!
Wow, thanks!
The strategy of starting from launch market, expansion market and then total market sounds more practical and make it feel much easier! Thanks Lance.
Excellent! It certainly works better for me as an investor.
Any good examples of a public company that has aligned their SAM, SOM TAM with their timeline/revenue projection?
For public companies, this would usually happen when they are giving earnings guidance. I have not seen them talk in terms of TAM-SAM-SOM, though. They do talk about projected growth and the size of various opportunities.
Thanks for suggesting I watch this video, Lance. Very helpful! Now my Market Opportunity slide wont confuse my potential investorsas much as it confused me trying to put it together!
Fantastic! So glad it helped!
Many thanks for such valuable content 👍Your advice is a real treasure!
Looking forward to your next videos!
So nice of you! Glad you enjoyed it!
Thanks Lance, much appreciated!
My pleasure!
Great one, Lance!
Is this channel called Fell the Boot or Feel the Boost? 🤔🚀
Learning a lot! I appreciate! 😎🤘
Ha! 🤣 It's "Feel the Boot" because some of the people I advised early on started calling me "The Boot" and I thought I would lean into that. 😳
So projected revenues are calculated per year right? So how is it related to SOM? Is SOM a yearly math? Like what if my Financial Projections are for 3 years is 5 million. My SOM over 5 years is 10 million.
All of them should be annualized. In five years, how much will you be selling each year?
That was just an example but I didn't know that TAM SAM SOM are annualized. I don't think enough people actually mentioned this till date. It's a pretty dumb doubt I guess. Also can you tell the difference between market size and GMV? I googled but didn't understand.
You are probably looking at Gross Merchandise Value. This is very similar to Gross Transaction Volume. These both refer to the total cash value of all the transactions on a platform. For marketplace and financial service companies, the problem is that they usually take a small commission on all those transactions. They may process a huge amount of money, but they only make a little bit.
In that case, the GMV or GTV vastly overstate the company's potential revenues. The market should be based on TAM-SAM-SOM of the revenue the company could make, not the transactions it processes.
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