The question is raised in this tweet:
My perspective:
- As a point estimate, they are probably not useful. Forecasting something that does not exist yet is hard, and ‘TAM’ is not interpreted in a consistent way like ‘next year’s revenue’ is.
- But as a framework to think about things, it could be useful. Forget about the exact definition of TAM. Instead help yourself and a potential investor think about one more approach to think about the potential of your business. “What would you have to believe in order to…”
In the SlideMagic app, search for ‘TAM’ and you will find a few templates that can get you started. Another good framework to use are waterfall charts where you can peel off market segment layers. To put your chart in context, you can add some sort of crystal ball image…
Photo by Sasha • Stories on Unsplash