- Persuade & Raise
- Posts
- ♞ Thinking About TAM in Pitch Decks
TAM in Pitch Decks
One of the most overlooked parts of a pitch deck is the market slide (specifically the total addressable market). Most founders, knowing that investors are looking for outsized returns, try to find the largest possible TAM so that they can claim they are operating in a $1T+ market.
What many founders fail to recognize is that this is a missed opportunity to pick a number that is strategically selected to highlight your strategic thinking, market entry strategy and unique value propositions.
So, let’s talk about how you can pick the right TAM to present to investors.
The best advice I can give for picking your TAM is always to work your way up, not to pick a random number you find online. Most founders search for large market size figures and then try to add a few together to justify a large TAM. Instead, focus on how much money you can make from one customer, then figure out how many possible customers you acquire; this is how you present a number that investors can believe.
When picking how many customers you can reach, start by focusing on those customers who will need your product the most; that figure is your short-term market size. Then, look at how many people don’t need your product but are likely to convert in the future; this is your larger TAM. Thinking about it in this way allows you to explain to investors how you are going to attract the users you need to hit the different market sizes that you need.
Using these steps allows you to show that you have thought through your market entry strategy, that you understand the types of customers who are going to be using your product, and that you understand what you need to do to attract different types of customers.
How do you pick your TAM |
Are you looking to grow your business? Here is how I can help:
📱 Book a Strategy Call to get 1:1 feedback on your pitch, pitch deck and/or fundraising strategy. (If you need general startup advice, then reply to this email, and I’ll let you know if/how I can help.)
Onwards and Upwards,
