Articles by Mike Preuss
- Modeling Total Addressable Market
Total Addressable Market (TAM) refers to the overall revenue opportunity available if a company achieves 100% market share. Calculating TAM helps determine how much effort and funding to put into a new business. There are top-down and bottom-up approaches to calculating TAM. The bottom-up approach, though more work, is often more accurate as it estimates potential sales and customers. Startups should focus on TAM as it helps shape their go-to-market strategy, forecasts, and fundraising efforts. Building an accurate TAM model requires understanding where the target market begins and ends for the company's specific product or service.