Total Addressable Market (TAM) remains a critical focus for early-stage founders. Many successful startups, however, emerged from markets that were initially nonexistent. Index Ventures partner Jahanvi Sardana emphasizes that startups must adapt to significant market waves, such as the rise of artificial intelligence. She categorizes TAM into three buckets: known market, emerging market, and invisible market. The known market involves replacing existing products, the emerging market indicates growth potential, and the invisible market represents opportunities that require founders to innovate and educate investors about unrecognized product needs.
"What was the market for search before Google? What was the market for operating systems before Microsoft, or the market for cloud before Amazon?"
"Have you shaped the right product to ride this wave? That's what we call product market fit."
"Everyone brushes their teeth; you have to tell me why you're building a better toothbrush."
"Think about smartphones in 2006, nobody knew they wanted them and they changed the world."
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