I hope this gives you a good sense of, one,
what the Total Addressable Market is.
Two, how to estimate it.
And thirdly, the range within which
the TAM for your beachhead market should fall.
Do not think that choosing your TAM is a one time event.
You will likely revisit and modify this calculation as you
progress and learn more.
Determining your TAM is a fundamental part
of creating a successful product or service.
You also need to have a clear understanding of your market
when presenting your company to others:
investors and people you want to recruit
as advisers or employees.
Because they will expect you to present a TAM
figure and explain your logic behind it.
Don't worry about whether it's a precise number.
Usually it's a range.
But you must understand how you got there.
However, do not spend an inordinate amount
of time just on the TAM calculation itself.
There are other factors that will influence your success
in your choice of beachhead markets.
These include gross margin, the compound annual growth
rate of the market, the speed in which you can dominate
that market, the potential for domination,
and what sustainable share can you get on an ongoing basis.
And finally, does this market have strategic value?
Will it lead you into other markets as well?
Now we're going to turn this over to you.
You've already done your market segmentation.
You've selected your beachhead market
and built your end-user profile.
Now let's find out what your TAM is.
Estimate the number of end-users in your beachhead market.
Also you need to determine how much revenue each end-
user is worth per year.
Do both by a bottom up analysis but also check
with a top down analysis.
But focus mostly on the bottom up analysis.
Submit your calculations and the logic for them.
Also record other interesting things
you've learned as you've worked to calculate your TAM.
We're very excited to see what you come up with.
Good luck.