Total Addressable Market
Who is your market? Market sizing review
TAM/SAM/TM
Total Addressable Market (TAM): How big is the universe?
Served Available Market (SAM): How many can your venture reach with your sales channel(s)?
Target Market (TM): What is your Target Market = the number of customers the company believes it can sell to?
Who are the most likely to buy?
Who is the cheapest/easiest to sell to?
Source: The Startup Owner's Handbook
See an overview of TAM in on pages 57–61 in ebook titled: Disciplined Entrepreneurship (linked).
Streaming Video content for review:
Market Size - Alexander Street Press Video
Market Size Video - Academic Video Online
You can do a top-down analysis using secondary market research [See left Market versus Industry]
market research = research about (market + industry)
Top-down sizing [Approach used in Library Workshop]
Sources: Industry analyst reports, market research reports, competitors’ press releases, library resources, discussions with investors
Metrics: units shipped or sold, dollars, page views, sales revenue, etc.
Bottom-up sizing
Sources: Consumer/customer counts and demographics, typical prices, aggregate spending habits
Metrics: Dollars spent, % or # of population, current prices
(Source: Adapted from University of Toronto Libraries)
Top Down Approach - Industry
Example: Nowadays (plant based meat alternative)
Their market is individuals who are eating meat alternatives (flexitarians, vegans, vegetarians)
What is their industry?
frozen food production?
meat, poultry, dairy processing (if there isn't a report for meat alternatives)?
meat alternatives?
agribusiness?
Market research
Most of the time, market research = research about (market + industry)
Use the left-hand size to go to step 2a - let's look at the industry (using secondary resources)
User Profile (Bottom up approach)
The user profile is used to identify secondary research sources for your calculations.
Remember - seldom does ONE source provide all of the needed information.
- How many users are there?
- Look at demographic information, is there a proxy (stand-in or similar product) that can be used to determine users), where can you collect intelligence (information) are your potential users? Examples of places to talk with potential customers are a: tradeshow, conference, meet-up, seminar, or hang-out in between a meeting or after their work (bar, restaurant, etc.).
Try the worksheet linked in ebook titled: Discipled Entrepreneurship Workbook (linked)
See an overview of TAM in on pages 57–61 in ebook titled: Disciplined Entrepreneurship (linked).