Index Ventures’ Jahanvi Sardana shares the truth about TAM and what founders should focus on instead

The founder of the start-up-to-end can not only go away from Tam-the idea of having a total addressable market for their startup can disrupt and conquer. However partner of the index initiative Jahanvi There is a reminder for all these founders concerned about searching TAM for their products or services: many startups have derived from the market that was largely non -existent at that time.

“What was the search market before Google?” Sardana asked visitors at all levels of Boston at the beginning of this month. “What was the market for operating systems before Microsoft, or the cloud market before Amazon?”

Sardana compares Tam to surfing. Every few years later, lots of wave founders must travel – first the internet came, then the mobile wave, then the cloud and now, he said, the biggest wave of all: artificial intelligence.

“Have you given the right product to run this wave?” He continued. “That’s what we call the product-market fit” ”

Which tam bucket are you on?

Sardana gives tam to three buckets: known markets, emerging markets and invisible markets.

First, the familiar market is already existing and it happens only when a founder tries to replace an inheritance, and an investor must prove why their early idea is better.

“Everyone brushes his teeth,” he said. “I have to tell me why you are making a better tooth brush.”

The emerging market is when a specific sector of the market uses a product and is likely to go to the mainstream.

Sardana said, “Think of a non -alcoholic beer before cooling.”

Then there is the invisible market, which is called “the biggest trap” and “some of a dark art”.

The market does not exist, and a founder has to create a basically one and the investors will have to provide evidence of how much they can be.

“Think about the smartphone in 20 2006; nobody knew they wanted them and they changed the world,” he added later that “people don’t know what they are looking for and sometimes you have to show them what they are.”

The audience at all levels, many of whom, with the early stages of founders, sardana questions, mainly about what investors want to see. For example, do investors want to see a tam slide on the pitch?

“Creating this slide and talking about mathematics on the back of your TAM,” Sardana said, though he added that investors are sometimes upset when the founders rely too much on the metrics of the industry without their own unique insight. Sardana also warned that the founders of the industry were not too much depending on the report of the industry. If he thinks about the market, if a founder is very dependent on an external service, it may indicate that they did not think deeply about the market they were trying to create.

“How do you shape tam in marketplaces, especially in big marketplaces?” An audience member asked.

“Well, this question hurts,” Sardana said quietly. After all, the index once went to Airbnb, believed that its TAM was very small.

“The reality is that AirBNB has created a completely new inventory, which is now bigger than the largest hotel brand and makes it a major change in behavior about how people travel,” he further adds that Marketplace tams are complicated. “If you want to focus again, the key is unlocking and how will the behavior change once you unlock the supply?”

The audience also asked Sardana to make any company stand up to investors as herself.

A strong, Sardana said, but really important. In the end, if a founder understands who is the customer who and why they are willing to buy their products, there should be no problem in the investors of any company, he added.

“We are in the business to evaluate the founders more than the market or product or anything else,” he said. “When you talk about your market, it’s a lens on your ambition” to your ambition “”