Can You Predict TAM?

The elusive pie in the sky term that everyone seems to have different thoughts on

I want to start off this post with a few screenshots using the Wayback Machine. I have purposefully obscured the names of the companies mentioned so we can do a fun exercise with the screenshots.

Security company in 2016

Well it says Salesforce…but from 2000

Self explanatory from 2005

The companies listed above are Snyk, Salesforce, and AWS. Now what’s the point of all these screenshots besides the fact that the Wayback Machine is so freaking cool?

Look back at the screenshots above and try and tell me how big that company would be. “Find and fix vulnerabilities in Node.js dependencies”….hmm maybe a few million developers?

“Online sales force automation that makes software obsolete”…I guess pretty much every company has a sales team, but not sure how many teams were ready to change the processes that were already working for them. There also happened to be a fair amount of competitors in the space as well. Likely made the number of companies in the 5-10M range but not sure how many were actually addressable?

The point being, all of these companies turned out to be very successful but in the beginning there was no way to tell the eventual TAM from their products and messaging.

What all of these companies did have in the beginning was targeted, end user specific messaging and clear call to actions “Create your free account”, “Take the Tour”, “Sign up with Github”.

Too many times, founders think investors want to hear how big the market is. For the most part, if you’re focused too much on the market education, then you probably have not found the right investors for your business. Over time the actual addressability of any market will reveal itself through execution, product adjacencies, and customer feedback/usage.

In the beginning of any new product though, regardless of the company’s maturity, the focus always needs to be on the end user pain, getting the first 5-20 users that use the product as part of their core workflow, and then iterating from there.

Great teams executing on their core product will then find adjacencies that customers either start using the existing product for or provide feedback on and figure out the differentiation that they can provide given their initial beachhead into the customers’ workflow. This is how the TAM expands over time.

Snyk 2022 - 5 product areas, Snyk Open Source works for a whole lot more languages than Node.js

Salesforce 2022 - 10 product buckets, each with a variety of SKUs to choose from within those buckets

AWS 2022 - where design goes to die but the product evolution is mindblowing from the SQS, S3, Mechanical Turk days

Across all 3 you can see the significant TAM expansion that no one could’ve predicted. First solve for specific user pain and then use that user love to expand into other areas of pain over time. Sooner or later, everyone will look back and see a company that has a TAM 10x larger than when it first started.

My colleague Ed Sim has a great quote that sums up all of this - “It’s not the TAM you start with, it’s the TAM you end with.”

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Stuff I enjoyed this week:

• Fun read on how the Michelin Guide works

  Trung Phan @TrungTPhan

  If the former Golden State Warriors video guy that sold the tape sees this tweet, here’s everything you need to know about Michelin Guide

  

  trungphan.substack.comThe Michelin Guide business, explainedPLUS: Did people in the past “look” older?

• Datadog’s report on AWS Security - All about the complex issues with IAM policies and the benefits of having multiple AWS accounts

  Emilio Escobar @eaescob

  Super excited about this! Kudos to the team for putting this together! Let us know your thoughts.

  

  Datadog, Inc. @datadoghq

  We are proud to release Datadog's first security study: "The State of AWS Security - A Look Into Real-World AWS Environments" Read the report to learn about key mechanisms to secure AWS environments and how organizations worldwide are implementing them. https://t.co/xBiNKgdizg

• Scott Belsky, Chief Product Officer of Adobe giving a comprehensive and clear interview on why Adobe acquired Figma - link here

  Marcelo P. Lima @MarceloPLima

  Usefully candid interview with @scottbelsky on the attractions of Figma and where $ADBE went wrong:

  

• Serverless confidential computing released by Cape Privacy!

  Gavin Uhma @gavinuhma

  Super excited to announce Cape today!! Encrypt your users' data. Deploy your functions to Cape's auto-scaling secure enclaves. Any developer can build secure apps and respect end-user privacy. Serverless confidential computing is here! Try our beta, free.

  

  capeprivacy.comIntroducing Cape: Encrypt, Deploy, RunCape is serverless confidential computing. Build more secure apps with Cape: encrypt data, deploy functions, and run within auto-scaling secure enclaves.

• What’s the different between Platform Engineering and DevOps?

  Shomik Ghosh 🇺🇦 @shomikghosh21

  My goal in life is to one day write as cleanly and concisely as @mipsytipsy This post on Platform Engineering and how it relates DevOps is 🔥 h/t @edsim honeycomb.io/blog/future-op…

  

  honeycomb.ioThe Future of Ops Is Platform Engineering | HoneycombPlatform engineering works cross-functionally with other SWE teams, optimizing their time to value and helping them own their code in prod.

• Proactive Security Alerts before the attacks happen! Much needed to make use cases in crypto stick by Hypernative as you need more user trust.

  HypernativeLabs @HypernativeLabs

  Thank you! @XaveFinance

  

  Xave Finance (formerly HaloDAO) @XaveFinance

  Special mention to @AnciliaInc, @HypernativeLabs and @Beosin_com for reaching out to us on our official social platforms to alert the team on the suspicious activity thereby allowing us to respond swiftly.