Re:Unit Economics (2015)
by ghaff on Sunday April 15, 2018 @04:53PM
(#16844893)
>'Total Addressable Market' is a bit of a vanity number
I sort of agree. Of course if the TAM isn't very large that's a red flag. But usually TAM makes a lot of assumptions about addressability and ends up with metrics like "I just need to capture 1% of the Chinese market."
TAM is also very much dependent of price points. I'm part of the potential market for lots of things if they're cheap enough--which often means a price point below what it costs to deliver the product or service.
I sort of agree. Of course if the TAM isn't very large that's a red flag. But usually TAM makes a lot of assumptions about addressability and ends up with metrics like "I just need to capture 1% of the Chinese market."
TAM is also very much dependent of price points. I'm part of the potential market for lots of things if they're cheap enough--which often means a price point below what it costs to deliver the product or service.