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The episode explores a common mistake made by founders when building startups: creating solutions before understanding the market's true potential. It introduces three market size terms: Total Addressable Market (TAM), Serviceable Addressable Market (SAM), and Serviceable Obtainable Market (SOM). Using the analogy of treating headaches, it explains how these terms work. TAM represents all individuals with the problem, SAM is the portion you can currently serve, and SOM is the specific target group in the short term. Understanding these market sizes is crucial to avoid building unnecessary "dams" before the "river" of demand arrives.
By VATSAL SAFAYAThe episode explores a common mistake made by founders when building startups: creating solutions before understanding the market's true potential. It introduces three market size terms: Total Addressable Market (TAM), Serviceable Addressable Market (SAM), and Serviceable Obtainable Market (SOM). Using the analogy of treating headaches, it explains how these terms work. TAM represents all individuals with the problem, SAM is the portion you can currently serve, and SOM is the specific target group in the short term. Understanding these market sizes is crucial to avoid building unnecessary "dams" before the "river" of demand arrives.