How much time should I spend estimating TAM?

Two words: Relatively little. Something in the range of 2-4 hours perhaps - definitely measurable in hours and not days.

TAM estimation is a little bit of a black art where you take the very imperfect data that you have, make some assumptions, and put out magic numbers that could be quite far from the mark. There are so many unknowns that spending days having fun with spreadsheets is just not a great investment in time.

Remember: TAM estimation is not a math exercise but a litmus test for whether this venture is worth your time. It's a tool that helps you iterate without overinvesting in the wrong thing early on in your business.

 

 

Was this article helpful?
0 out of 0 found this helpful


      This website and all posts and content are intended for educational purposes only and for no other purposes. This website does not and is not intended to provide legal, financial or tax related advice. Although we take great care to make sure that all of our information is accurate and useful for it intended educational purposes, if you have a specific issue for which you need actionable advice, please come to the Martin Trust Center in person to speak to one of our Entrepreneurs in Residence (EIR) or consult a licensed attorney or other professional. Despite the backgrounds and qualifications of our staff, mentors, lecturers, authors, EIRs and speakers no attorney-client, advisor, or other confidential/privileged relationship exists or will be formed between you and the Martin Trust Center or the Massachusetts Institute of Technology. Under no circumstances should any content be relied upon in making any decisions that could have any financial or legal impact(s).
Have more questions? Submit a request

Comments

Powered by Zendesk