Total Addressable Market (TAM)

Definition

The total potential revenue opportunity for your product or service, basically the number used to make investors excited and boards comfortable. It's rarely based on defensible market research.

Example Usage

Our TAM is $50 billion, which sounds impressive until you realize we can actually capture maybe 0.001%.

Origin

From business strategy and venture capital terminology

Fun Fact

TAM estimates often start at $10B and mysteriously grow each quarter in investor decks.

Source: Business Strategy and Finance

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