So there's three main criteria that we
use to select our end-users, right.
The first is that they're all on smartphones.
They're all technology savvy.
The second is that they have calendars
online that are up to date and accurate.
And that's how we can determine when
optimal time for them to meet is.
And the third is that they're all very highly networked.
They're all people who go to many different types of social
events, have many different groups of friends that they
don't-- that they hang out with during any given week.
So our end-user is a MBA candidate, student from one
of the top 25 business schools across the United States.
He or she are highly networked.
They are very fastidious, or the are
very vigilant about keeping their calendars up-to-date They
are detail-oriented.
They tend to be very good coordinators.
They tend to be social.
And they tend to be pretty tech savvy,
or at least they like to consider themselves
very tech savvy, new tech.
So there are early adopters and open to trying
new technologies.
Schedules need to be up-to-date.
And they need to actually have their schedules and calendars
on the Internet.
And so those two things are met by MBA students
because they worked for five years before.
So they have gone to the processes.
They're used to doing it.
It's almost built into there DNA at this point.
They also have lots of group meetings, multiple group
meetings, even within a single day period.
So that's why they spend so much time scheduling.
Saving the time that's spent scheduling is very important
because their time is valuable.
And they're currently paying a lot of money,
both in opportunity costs and in tuition.
Focusing on these criteria in their primary market research
led Thyme to build a very specific end user profile.
And how many students are there who fit this profile?
There are 19,000 MBA students at the top 25
schools across the US.
Bingo.
Now we have the number for the end-user population variable.
Now we need to look at the other variable to calculate the TAM.
That is the revenue, on average, that one end-user generates
per year.
Once we have that, we just multiply the two together,
and we know our TAM.
This is an excellent place to be right now.
But let's pause for a second and discuss
what's a good TAM for your beachhead market
and what's not a good TAM.
Generally, I recommend a TAM between $20 million and $100
million per year.
A TAM over $1 billion raises red flags.
Your beachhead market is either not specific enough,
or there will be formidable barriers to entry.
If it's over $1 billion, I think of it as boiling the ocean.
You're trying to do too much.
You need to be more focused.
You need to find something that you
can conquer quickly and easily.
If your TAM is less than $5 million per year,
it's likely you haven't found a big enough beachhead market.
Especially because entrepreneurs tend
to inflate their TAM and their expected share of it.
So $5 million is probably not going
to give you enough to reach cash flow positive.
When we started addressing the...doing the total addressable
market for our beachhead market, we came up with a calculation
that we would add $56 million in value
if we capture the entire market.
That sounds like a great number.
But the more we dug into it, and we search asking,
and we started doing primary market research,
and we started asking end-users, well how
much are you willing to pay.
That's a market that's a value capture question?
It turns out they would pay $1 for an app.
And that added up to $19,000.
So the difference between $56 million and expected value,
versus the $19,000 so we could actually capture.
That actually drove quite a few business decisions
and changed the direction that we decided to take our product.
So after connecting our primary market research,
we concluded that we are actually,
in fact, not going to be charging for this product.
Offering the product for free is a serious decision.
And one that the Thyme team is not and should not
take lightly.
Effectively Thyme's TAM for their beachhead market
is zero at this point.
This is a good moment to ask, should Thyme
pursue a different beachhead?