Podcast · ~40 min

Mastering Startup Math: TAM, CAC, Churn, LTV and more

Shripati Acharya and Amit Somani, Prime Venture Partners · Prime Venture Partners Free Intermediate India

Mastering Startup Math: TAM, CAC, Churn, LTV and more

Two Indian early-stage VCs walk through common TAM mistakes and how to take a bottoms-up view starting from the ideal customer and their willingness to pay, including how to think about a category-creating company. It gives Indian context on why borrowed top-down numbers mislead. Practical and specific about what investors here actually probe.

  • Build TAM from the ideal customer profile and what they will pay.
  • Top-down magical numbers fall apart under investor questioning.
  • Category creators must reason from behavior, not from an existing market total.
Watch on YouTube ↗

It answers 2 questions

  1. How do I estimate a market size when the product I'm building doesn't have a category yet?
  2. How much of the market do I realistically need to capture for this to be a real business?

Read with it

  1. The single best thing ever written on customer conversations. It teaches you to ask about the customer's life and past... momtestbook.com Book · ~130 pages The Mom Test Rob Fitzpatrick
  2. The definitive essay on where good ideas come from: notice problems you personally have, don't force it. Use it as the lens for... paulgraham.com Essay · ~20 min read How to Get Startup Ideas Paul Graham
  3. The essay that put 'product-market fit' into the startup vocabulary. Read it for the gut-level description of what PMF feels... pmarchive.com Essay · ~15 min read The Only Thing That Matters Marc Andreessen
  4. Most market sizing advice online is generic TAM SAM SOM filler. This one is written by an investor, backed by a survey of 30... Pear VC Essay · ~15 min read Market Sizing Guide Ian Taylor
  5. When there is no category report to point at, you have to build the number yourself, and this is the essay that teaches you... Andreessen Horowitz Essay · ~20 min read 16 More Startup Metrics Anu Hariharan, Frank Chen, Jeff Jordan
  6. A concrete, copyable Google Sheet (no paywall, no credit card) that builds your number bottoms-up from customer segments and... Visible.vc Template · ~15 min to fill in Total Addressable Market Template (free Google Sheet) Mike Preuss
eChai Partner Brands The partnership →