Total Addressable Market

Also called TAM

Total addressable market: the total revenue opportunity if you captured 100 percent of the demand for your product. The biggest of the three market-size numbers.

Why it matters

TAM signals whether a market is big enough to build a large company and back a venture return, which is why investors ask for it. But a huge TAM is meaningless without a credible path to a real slice of it, so it is easily abused.

For example

A founder claims a 50,000 crore TAM for all Indian SMB software, then narrows to the slice they can actually serve to make the number honest.

Worth your time

All Markets Are Not Created Equal Above the Crowd · article A reminder that a market's raw size is only one of many factors that decide whether it is worth attacking, the rest of which a TAM number hides.

Related terms

Go deeper

See how founders actually handle this on Growing and marketing, part of the Starting Up hub.

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