Index Ventures’ Jahanvi Sardana shares the reality about TAM and what founders ought to deal with as an alternative

Early-stage founders simply can’t get away from TAM — the idea of getting a complete addressable marketplace for their startup to disrupt and conquer. However Index Ventures companion Jahanvi Sardana has a reminder for all these founders apprehensive about discovering TAM for his or her services or products: Many startups have emerged from markets that, on the time, had been primarily nonexistent.

“What was the marketplace for search earlier than Google?” Sardana requested the viewers at TechCrunch’s 2025 All Stage occasion in Boston, held earlier this month. “What was the marketplace for working techniques earlier than Microsoft, or the marketplace for cloud earlier than Amazon?” 

Sardana compares TAM to browsing. Each few years, there are huge waves founders should trip — first got here the web, then the cell wave, then the cloud, and now, she mentioned, the most important wave of all: synthetic intelligence. 

“Have you ever formed the correct product to trip this wave?” she continued. “That’s what we name product-market match.” 

Which TAM bucket are you in?

Sardana locations TAM into three buckets: recognized market, rising market, and invisible market. 

The primary, recognized market, already exists, and it’s when a founder seeks to exchange a legacy incumbent and should show to an investor why their startup concept is healthier. 

“Everybody brushes their enamel,” she mentioned. “You must inform me why you’re constructing a greater toothbrush.” 

The rising market is when a sure sector of the market is utilizing a product, and there’s potential for it to go mainstream.

“Take into consideration non-alcoholic beer earlier than it turned cool,” Sardana mentioned. 

Then there’s the invisible market, which Sardana calls “the most important lure,” and “additionally a bit of little bit of a darkish artwork.” 

The market doesn’t exist, and a founder has to primarily create one and supply buyers with proof of how progressive they are often. 

“Take into consideration smartphones in 2006; no one knew they needed them and so they modified the world,” she mentioned, later including that “folks don’t know what they’re in search of and typically you need to present them what’s doable.” 

The viewers at All Stage, lots of whom are early-stage founders, peppered Sardana with questions, largely about what buyers need to see. As an example, do buyers need to see a TAM slide in a pitch deck? 

“It’s OK to create that slide and speak concerning the math behind your TAM,” Sardana mentioned, although she added that typically buyers get irritated when founders rely an excessive amount of on trade metrics quite than having their very own distinctive perception. Sardana additionally cautioned founders to not rely an excessive amount of on trade studies. If a founder is just too depending on an exterior service to dictate how they consider the market, it may well sign that they haven’t thought deeply concerning the market they’re making an attempt to construct in, she commented.

“How do you measurement the TAM within the marketplaces, particularly large marketplaces?” one viewers member requested.

“Nicely, that query hurts,” Sardana quipped. In spite of everything, Index as soon as handed on Airbnb, having believed its TAM was too small. 

“The fact is Airbnb created an entire new stock, which is now larger than a few of the largest lodge manufacturers, and that led to a giant change in conduct on how folks journey,” she mentioned, including that market TAMs are tough. “You need to deal with, once more, what’s unlocking provide, and when you unlock the provision, how will conduct change?” 

The viewers additionally requested Sardana what makes an organization stand out to an investor like herself. 

A tricky one, Sardana mentioned, however a extremely vital one. Finally, if a founder can perceive who the client is and why they’re keen to buy their product, then an organization shouldn’t have any downside standing as much as buyers, she added.

“We’re within the enterprise of evaluating founders greater than markets or merchandise or the rest,” she mentioned. “Whenever you speak about your market, it’s actually a lens in your ambition.”