How to calculate Total Addressable Market (TAM) - Startups 101

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What is the Total Addressable Market, and How to Calculate it -
In this episode, we break down basic definitions such as TAM, what are the most common mistakes made while calculating and presenting this to investors, and how to estimate it properly. Steve will also demonstrate the simple formula that applies to every startup, no matter what the industry is.
#slidebean #startups #TAM
Check DreamIt's RU-vid Channel: / dreamitventures
Follow Steve Barsh: / stevebarsh
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About Slidebean
Slidebean is a platform for founders to scale their startups. Our platform offers everything you need to build your startup, your pitch deck, set up your company, and start gaining traction.
Our team of experts can also help you write and design your pitch deck and build the financial model for your startup.
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Опубликовано:

24 фев 2020

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Комментарии : 269

@slidebean Год назад

A platform for founders to scale their startup ► youtube.slidebean.com/TAM-comment

@johnnygarces2216 3 года назад

this was an MBA lecture done in 15 minutes. im in awe

@COSMO_INC1 2 года назад

Hahaha! It's True!

@jeevanjotsinghnarula2453 2 года назад

Haha, well not taking any MBA so I am fortunate.

@carleenhaylett1759 4 года назад

Pure gold. Just redid my TAM slide. GUILTY as charged as a top-downer. Total convert now my entire life is about bottom up! THANK YOU yet again.

@stevebarsh7727 4 года назад

Carleen Haylett Thx for watching and so glad it was helpful! - Steve @ Dreamit Ventures.

@slidebean 4 года назад

Thank you! We're so happy to see it helped!

@harshverma3737 3 года назад

I have to admit that this is the best channel.

@bashimolowo 3 года назад

I concur! I visit for 30 minutes every night.

@charleyluckey2232 Год назад

Still no change on the market. We are already in the big crash, Inflation is a catastrophe. This CPI report is a colossal failure. To bring the housing market to a halt, the FED will have to pull all the stops. The unfortunate issue is that other markets are being decimated. If you want to stay green, you have to rely on a lot of diversification. Currently up 14% and being careful. Still a better deal than leaving it in a savings or checking account yielding 0-1 percent interest

@riggsmartins4033 Год назад

If you are not in the financial market space right now, you are making a huge mistake. I understand that it could be due to ignorance, but if you want to make your money work for you, prevent inflation from eroding your savings, build generational wealth, and cultivate good habits and financial knowledge, you must be in the market

@charleyluckey2232 Год назад

You are right! I diversified my $400K portfolio across various market with the aid of an investment coach, I have been able to generate a little bit above $1.2m in net profit across high dividend yield stocks, ETF and bonds during this red season

@charleyluckey2232 Год назад

My advisor is "LARRY KENT NICK ". In terms of portfolio diversity, he's a genius. You can glance his name up on the Instagram and verify him yourself. He has years of financial market experience

@charleyluckey2232 Год назад

INSTAGRAM

@charleyluckey2232 Год назад

@ Larry Kent Nick Trading

@brianndege5331 3 года назад

This video is awesome, I'm a victim of top down approach and today the approach will change. Greetings from Kenya slidebean

@slidebean 3 года назад

Thank you! All our love back to Kenya!

@ajeeli_travels 3 года назад

Amazing, thank you! ... I think a lot of people don't understand how important this video is !

@excel2minutes 3 года назад

Great content. Please make a video on the assumptions one usually do while calculating TAM, SAM, market sizing. Also, where top down and bottom up approaches are effective.

@k80ahh 3 года назад

I love these videos and they are super helpful. Can you make a more detailed video with multiple examples showing how to obtain good data to calculate bottom-up TAM. It isn't obvious or easy to understand how to figure out how many ideal customers are in the segmented market I will use in my estimate.

@naava1978 4 года назад

I LOVE this GUY! Please collaborate with them again. I loved this video and saw so much value.

@slidebean 4 года назад

We love Steve, too! Looking forward to our next opportunity to collaborate!

@dsrathore01 5 дней назад

How did it go? It has been 4 years now, were you able to build the company you were building, and raised capital?

@MikeLingle 3 года назад

Great walkthrough of TAM! It seems like growth (CAGR) of the target market is also an important element to mention to investors.

@slidebean 3 года назад

Thanks for watching! Steve's insights are awesome!

@chloealix8063 2 года назад

Absolutely amazing and the best thing I've seen. So simple and clearly explained. Thank you so much!!

@user-zw7cd7pe4u 9 месяцев назад

Well that would be impossible to do considering I'm in my late 50s and I'm more interested in investments that could set me up for retirement in my 60s, my goal is at least $2million.

@MaryPatricia-wr3wj 9 месяцев назад

As you plan your retirement, be sure to talk with a financial advisor who can help you make the most of your retirement investing scheme.

@user-zw7cd7pe4u 9 месяцев назад

@@MaryPatricia-wr3wj Very true, If you're looking for help building a retirement nest egg, you most likely want a certified financial planner with expertise in retirement planning. With the aid of a coach, I grew my reserve from $160k to almost $600k during this Red season.

@MaryPatricia-wr3wj 9 месяцев назад

@@user-zw7cd7pe4u How can one find a verifiable financial Planner, I buy the idea of employing the services of a Financial Advisor because finding that balance between saving and living requires counsel.

@user-zw7cd7pe4u 9 месяцев назад

@@MaryPatricia-wr3wj KRISTIN GAIL CUNNINGHAM. On the internet, that’s the financial advisor I use. She’s verified; you could also read more about her and then communicate with her. it’s always good to do your research before putting your money into any investment.

@MaryPatricia-wr3wj 9 месяцев назад

@@user-zw7cd7pe4u Thank you so much! Found her webpage and left a message. Hopefully, she responds.

@user-tn3fo3pj2x 4 года назад

this video is a gold mine!

@stevebarsh7727 4 года назад

Thanks for watching! Very happy you found it helpful!

@slidebean 4 года назад

Thank you!

@kennygo770 2 года назад

I realized through this video that marketing is by doing own research with mine not searching someones report pay to read. what a lecture what a genious talented man.

@kapetanioss Год назад

Thank you! That was super helpful

@Superstud11 3 месяца назад

Thank you for posting. I've been a senior sales executive for years. Companies coming from overseas want to be successful in the US but they don't have the right approach. I will be sure to forward this to the many who ask me for help understanding strategy.

@camiloguzman1801 3 года назад

Not only this video is gold info, but has the right aproach in how to take on a market, and how your firm construct a key advantage over that spot. Guys and Gals of Slidebean for me you have surpassed the already high expectation that i had over your content.

@slidebean 3 года назад

Thank you so much, Camilo! Glad the video was helpful!

@georgecool9917 3 года назад

Very simple and clear explanation!

@aprilmintacpineda2713 4 года назад

THANKS!

@stevebarsh7727 4 года назад

Glad you liked it. Thx for watching!

@scottmarker-treasurevalley7244 3 года назад

Wow! This is a fantastic quick overview for any company of any size wanting to learn how to figure their TAM, total addressable market. Spoilers alter. Most of you are probably figuring it wrong. Thanks for the video!

@COSMO_INC1 2 года назад

True!

@william.darrigo 3 года назад

You explained this so simply. Thank you as always

@COSMO_INC1 2 года назад

Yeah, you are right!

@alexandramccarthy3790 2 года назад

Top down model is taught by so many other channels. No wonder so many of us are trying to apply it to our business. I did think it doesn't make sense.... Now I know why! :)

@justthej 3 года назад

Very helpful, thanks, Steve!

@youknowitzg00d 4 года назад

Cool. I kinda like your premiers. As I sit here in my startup office I got something asides from my next water break to look forward to.

@bhasuda 4 года назад

What is your startup about?

@bhasuda 4 года назад

And the DF?

@slidebean 4 года назад

Thank you for watching!

@stevebarsh7727 4 года назад

Glad you liked it! -- Steve

@indianspiritualitygyan7660 3 года назад

Thanks for making this video and saving my life

@adikrashnik Год назад

this is the most practical helpful video I've seen in my life

@animelover5093 10 месяцев назад

I'm glad found this content. it helps with my learning journey for product/maket

@lighttheoryllc4337 3 года назад

Salam, Great Video of info that the SBA and SBDC centers will NEVER tell you.

@kritivatsa8713 11 месяцев назад

Literally the best explanation! it worked for me very well

@akbarkhan-nq3xl 4 года назад

Very very very helpful and informative. Thank you SlideBean

@slidebean 4 года назад

Glad it was helpful!

@lexie02jones25 4 года назад

Can you do more videos like this?! where you bring in investors to help us topic like this? it's really helpful. I just realized I was way off on my TAM! LOL.

@slidebean 4 года назад

Thank you for watching! We're glad it helped! Browse our channel as there are many more videos related to this one! Also, you're welcome to discuss with other founders or Caya on Discord slidebean.com/startup-cafe

@kimgreen3933 2 года назад

I am always on the hunt for good learning tools. This is a good one!

@itsDe0n Год назад

so amazing, got to know a lot of things in detail Thank you

@anthonyifemade2305 2 года назад

Thank you so much for prodiving multiple examples

@vulnmachines 3 года назад

As a cyber security company, This video has solved my problem :) Thank you slide bean. I wanna connect with him.

@daveking4229 4 года назад

Interesting topic and definitely have fallen into the top down trap on early startups I tried. Nice to know that I finally got it right. My tam is $1.6B just in the US based on gov stats. Now who has a checkbook and a pen handy LOL

@stevebarsh7727 4 года назад

Thanks for watching Dave and glad to hear you got it right! - Steve

@fliu5282 4 года назад

if you are a 4-Legged Cap Table startup, let me know. meaning: 1. you are a coder, 2. you got a co-founder. 3. you got an MVP (minimum viable product) 4. you got PMF (product market fit). Optional 5. Extra Leg: if you got $50k in friends and family round invested in you, i have the checkbook and a pen handy. LOL. Other than that, keep dreaming. P.S. Go convert your CPA's LLC stupid advise into Deleware corp, then i can open your e-mail; otherwise, it automatically all goes to junk folder and gets "deleted".

@ahmetakil787 4 года назад

I can listen to him for days

@slidebean 4 года назад

Thanks, Ahmet!

@JohnSmith-hn6kv 2 года назад

I find these sort of videos fascinating. Not relevant to me at all, but I love 'em.

@adrianmoreno2717 2 года назад

First time learning about TAM and I fully get it.

@victorokello9611 3 года назад

This was of great value!!

@pavlosvasileiadis8209 4 года назад

Super useful, keep on the great work!

@slidebean 4 года назад

Glad it was helpful!

@ProfessionalTycoons 4 года назад

My God this video is SUCH GOLD

@slidebean 4 года назад

Thanks Jae! 😊

@petrolking7824 3 года назад

That's great content. Thanks 🙌🏿

@kefamutuma7402 4 года назад

BEAUTIFUL VIDEO. well explained!!

@slidebean 4 года назад

Thank you for watching!

@santiagomachado2587 11 месяцев назад

Excelent content, cristal clear, please can you share also SAM and SOM calculation for a startup, thanks!

@nandphal8955 2 года назад

I love Caya. He is simply faadoo

@jodysterling1813 2 года назад

OMG this was AMAZING thank you

@Je.rone_ 3 года назад

This video is extremely informative

@_ADHK293A_ 2 года назад

wow, thank you, this is gold !!

@techviking23 2 года назад

pure gold! thank you!

@abdulahmed6307 Год назад

thank you for this!

@sanjaypradahan4703 3 года назад

Thanks, a great learning.

@MohammedAtifSami 3 года назад

wow this is so helpful, thank you, this is really so logical

@lernik4 Год назад

Thanks a lot for the video. Probably the best that I've seen so far. I have a few questions if I may. Is showing an accurate TAM number sufficient? Or is it also important to show SAM and SOM? And if the market is growing fast (30-35% CAGR), should the startup show the TAM for the current year or forecast the future TAM in 5-10 years (when the exit is assumed to happen)?

@abdulrhmankhallil8254 4 года назад

Can't be better, Piece of knowledge that worth Thanks, Slidebean wish you the best KEEP GOING

@stevebarsh7727 4 года назад

Very happy you found it worthwhile. Thx for tuning in! -- Steve

@slidebean 4 года назад

Our best wishes back to you! Thank you!

@jariatoujallow9577 3 года назад

well explained in a simple language

@etanmatt 3 года назад

Amazing Video!!!!

@everythingjamieraine9270 9 месяцев назад

THIS WAS GREAT!

@rayhyltonjr 2 года назад

Thank you!

@Uniuni266 4 года назад

Great video very informative thank you!

@slidebean 4 года назад

Glad you enjoyed it!

@janetlindiwe 2 года назад

Thanks a lot this was super helpful. But my question is if I look for the wellness industry and then I only want women age x to x for example... how do I go about that? It's easy to find statistics on the total market or regional markets but then to know how many of those actually fit my other demographics?

@aldemaro1183 Год назад

Great video, totally agree! Can you do a explanation on SAM and SOM ?

@sarmy2420 Год назад

Thank you ❤

@patrickdainese2166 4 года назад

Hi, brilliant video. Thanks for that. Is your definition of TAM what others explain with SAM or SOM? Because you are breaking down the TAM pretty much there would not be much left for SAM or SOM. Thanks for your answer.

@slidebean 4 года назад

Good Q! Welcome to discuss with other founders or Caya on Discord slidebean.com/startup-cafe

@JakobHelm 3 года назад

This is the key question here.

@Ken-ul6ll 2 года назад

THIS

@nelsonnigel4775 3 года назад

This is very good information

@nandinijoshi5768 2 года назад

This is worthy sharing

@ikennapaschal3875 4 года назад

Steve is a great guy.

@stevebarsh7727 4 года назад

Thx for the props @Ikenna and for watching! - Steve

@slidebean 4 года назад

He is! :) Thank you for watching!

@rushabhgorghate3033 3 года назад

Thank you so much

@pnjwck 3 года назад

Great explanation. Please the SAM and SOM plss

@dorisjohn1779 4 года назад

Brilliant video.

@slidebean 4 года назад

Glad you enjoyed it!

@gspencer6750 2 года назад

This was gold.

@emmanuelokebugwu6944 3 года назад

I just tossed my entire startup financial model into the trash! What a revelation!

@slidebean 3 года назад

Hope the video helped!

@emmanuelokebugwu6944 3 года назад

@@slidebean I'll be spending this night redoing all my models - Thank you for this channel and the superb content you put out!

@sawsanagourmat6142 3 года назад

Hi ! Thanks for the great content, how do you consider competitors in the TAM? I am thinking for example about Kindle who gained market shares compared to hardcover books. Do you take into account customers how could switch to your product? Thanks !

@slidebean 3 года назад

Good Q! Welcome to discuss with other founders or Caya on Discord slidebean.com/startup-cafe

@y_social_ 7 месяцев назад

super great!

@User-du7kf 3 года назад

It was intuitive

@spencerdepas4235 3 года назад

Thank you.

@kristofvizy3970 3 года назад

Great video! But how do you even start to calculate how many branches of mid-sized banks (or whatever selection you finally found possible) there can possibly be?

@slidebean 3 года назад

Good remarks! Welcome to discuss with other founders or Caya on Discord slidebean.com/startup-cafe

@bluecafe509 3 года назад

Very good.

@techmadeazy 2 года назад

This is awesome. But I have a question. In the bottom up process, how do you calculate the TAM for something as universal as WhatsApp? Imagine WhatsApp when they had launched and lets imagine that it charged $1 per user per month for the sake of this exercise. How would you calculate the number of customers at that stage? Any thoughts guys?

@ajromeroesclusa 2 года назад

Any ideas on how the "customers x price" would work for a lending fintech model ? Did the "intuitive" top-bottom strategy, but reviewing this approach for TAM

@chasesessoms8443 3 года назад

This was so damn helpful

@Cloudnine2024 Год назад

Good info! But where do you get the information to get this drilled down in information?

@alisherfez32 2 года назад

Thank you so much!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

@faisalwahabkhan5310 4 года назад

awesome video and a golden advice

@stevebarsh7727 4 года назад

Happy you found it worthy! Thx for watching. -- Steve

@slidebean 4 года назад

Thank you, Faisal!

@denzelmosore 4 года назад

That was rich! Thanks Caya and dreamit

@stevebarsh7727 4 года назад

@denzel - thanks for watching! you're welcome! -- Steve

@slidebean 4 года назад

Thanks, Denzel!

@aligulaj 3 года назад

Question: What pricing would you use if you have a three tier subscription plan to calculate the TAM? Would I be wrong to use MRR or ARR? Or will it be the sum total of TAMs for each plan? Great channel by the way.

@Robertohanas Год назад

Might want to calculate the TAM using adoption/ tier. Ex: Price: T1Px0.25+T2Px0.6+T3Px0.15 T1P = Tier 1 Price 0.25= projected share of the customers that will choose that tier. This is how I'd do it,hope it helps. Have a good day.

@sampat97 Год назад

@@Robertohanas Hey dude, this was really helpful. Do have anything on how to calculate the projected share of customers?

@fliu5282 4 года назад

don't know where you come from but the presenter is 100% accurate, truth and the way "ALL startup should subscribe to". the rest are just "some ink over flow on toilette paper".

@slidebean 4 года назад

Thanks, F! David is a special guest from DreamIt Ventures, and we love him as well! Caya is the CEO of Slidebean, the company that hosts/created this RU-vid Channel. Find out more at slidebean.com Welcome!

@pindakaashonden 4 года назад

Hi Steve, Great informational video once again! Question: why are you not a fan of SAM & SOM? Thanks

@stevebarsh7727 3 года назад

SAM and SOM are fine. I often find TAM + your go-to-market strategy get's the job done very clearly.

@brightreepteltd6434 2 года назад

Good video. I am a tech startup in Singapore. Hope to get connected with the speakers. Thanks.

@aditya1290 3 года назад

Timestamps 0:00 - Intro 0:31 - Steve Barch and TAM 1:10 - Mistakes startups do for TAM 1:35 - What is TAM NOT 3:36 - How to calculate TAM 5:35 - Examples 8:35 - Pricing 10:05 - Narrowing 10:55 - Slidebean example 12:25 - What investors is looking for 13:45 - Summary All the best

@euphrosyne3484 Год назад

Thank you!

@alexnjoroge3186 4 года назад

Amazing video 👍🏾

@stevebarsh7727 4 года назад

Glad you liked it. Thx for watching!

@slidebean 4 года назад

Thank you for watching!

@isaacbalintuma9157 2 года назад

This is a very helpful video, but my question is "If you are developing a social media app like facebook, who make up the TAM customers? the advertisers OR the users?"

@varshard0 4 года назад

I like how Steve used Slidebean as an example

@slidebean 4 года назад

We love Steve!

@noitpursid6190 4 года назад

@@slidebean Can you make a video on SAM,SOM

@oxglowinc.1614 4 года назад

Impressive content.!

@stevebarsh7727 4 года назад

Glad you liked it @oxglow. Thanks for watching! -- Steve @ Dreamit

@slidebean 4 года назад

Thanks for watching!

@damveiss7517 4 года назад

Interesting ! But what about the TAM when your business model is based on a variable commission ? For example in the betting/casino industry where the user deposit the amount of money he wants, there is no fixed price for your service so the TAM is not relevant ? Thanks guys and continue the good work ;)

@stevebarsh7727 4 года назад

Just document your assumptions around spending (price) and possibly segment the audience and spend.

@damveiss7517 4 года назад

@@stevebarsh7727 Thanks Steve. Looking forward to see more content like this

@stevebarsh7727 4 года назад

@@damveiss7517 It's coming! Look for the #DreamitDose in the RU-vid Dreamit Ventures channel.

@nandphal8955 2 года назад

@@stevebarsh7727 Thanks Steve

@mistere1063 3 года назад

Man, started calculating my TAM bottom up, my partner is a top down guy

@mistere1063 3 года назад

also, i sell multiple products so I used the average amount of money customers spent

@shreyasdeshpande6653 2 года назад

Thanks a lot sir. But how to calculate market growth rate as market growth rate is( (market size for 2nd year - market size for first year)/ market size for first year )*100. I'm working on my startup and I don't have previous year data, this is my first year. How can I determine my market growth rate

@keshavsharma1029 2 года назад

Hey I am an early-stage startup founder and had a question about the TAM. So we are creating wearable AR glasses which is a submarket of wearable devices and we plan to expand our product portfolio overtime to capture more of the wearable devices market. So as the TAM, should I include the whole wearable device market size (as per reports) or just the wearable AR glass market size?