Stop lying about your market size. (Yes, I'm talking to you)
The hard truth:
99% of TAM slides are fantasy.
Here's why:
1. The Top-Down Trap:
"Global healthcare is $8T"
"EdTech is $250B"
"FinTech is $4.7T" = Meaningless numbers
Reality: Your actual market is tiny.
2. What VCs Actually Think:
- Your TAM slide = Skip
- Your SAM numbers = Fiction
- Your SOM dreams = Eyeroll
3. The Real Way = Bottom-up only
Current price x Realistic customers x Actual usage = Real market size
4. Signs Your TAM is Wrong:
- Includes China/India markets
- Uses "if we just get 1%..."
- Cites Gartner/McKinsey
- Shows trillion-dollar numbers
The Truth:
Small TAM + High penetration > Huge TAM + No penetration
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Very interesting work Burak
I am an absolute believer in bottom up. It’s the only way to get to the real number. TAM, business cases, etc.