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 apprehensive 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 techniques 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 trip — first got here the web, then the cellular wave, then the cloud, and now, she stated, the largest wave of all: synthetic intelligence.
“Have you ever formed the correct product to trip 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 switch a legacy incumbent and should show to an investor why their startup concept is best.
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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’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 buyers with proof of how modern they are often.
“Take into consideration smartphones in 2006; no one knew they needed them they usually modified the world,” she stated, later including that “individuals don’t know what they’re in search of and generally you must present them what’s doable.”
The viewers at All Stage, lots of whom are early-stage founders, peppered Sardana with questions, largely about what buyers wish to see. As an example, do buyers 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 generally buyers 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 experiences. If a founder is simply too depending on an exterior service to dictate how they give thought to the market, it may sign that they haven’t thought deeply in regards to the market they’re attempting to construct in, she commented.
“How do you measurement the TAM within the marketplaces, particularly massive marketplaces?” one viewers member requested.
“Properly, that query hurts,” Sardana quipped. In any case, 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 greater than a few of the largest resort manufacturers, and that led to a giant change in conduct on how individuals journey,” she stated, including that market TAMs are tough. “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 troublesome one, Sardana stated, however a very necessary one. Finally, if a founder can perceive who the client is and why they’re prepared to buy their product, then an organization should not have any drawback standing as much as buyers, she added.
“We’re within the enterprise of evaluating founders greater than markets or merchandise or anything,” she stated. “Once you speak about your market, it’s actually a lens in your ambition.”
