Reimagining TAM: A New Perspective for Early-Stage Founders
As early-stage founders embark on their startup journey, the concept of TAM (Total Addressable Market) looms large. The idea of identifying a market to disrupt and conquer is ingrained in the startup ecosystem. However, Jahanvi Sardana, a partner at Index Ventures, offers a refreshing reminder to founders: many successful startups have emerged from markets that were once non-existent.
During JS’s 2025 All Stage event in Boston, Sardana posed thought-provoking questions to the audience. “What was the market for search before Google? What was the market for operating systems before Microsoft, or the market for cloud before Amazon?” These rhetorical questions challenge the conventional wisdom of relying solely on existing market data.
Sardana draws an analogy between TAM and surfing, highlighting the need for founders to ride the waves of technological evolution. From the internet to mobile to cloud computing, each wave has presented unique opportunities for innovation. According to Sardana, the current wave of artificial intelligence represents the biggest opportunity yet.
She emphasizes the importance of achieving product-market fit, urging founders to align their products with the prevailing technological trends. Sardana categorizes TAM into three buckets: known market, emerging market, and invisible market.
In the known market, founders seek to replace established incumbents by offering a superior product. This requires convincing investors of the value proposition in a competitive landscape.
The emerging market signifies a sector with growth potential that could transition into the mainstream. Sardana cites the example of non-alcoholic beer, which gained popularity after initially being a niche product.
However, it is the invisible market that Sardana deems as the ultimate challenge. In this scenario, founders must create a market where none exists and demonstrate their innovative potential to investors. She references the advent of smartphones in 2006, a disruptive innovation that reshaped consumer behavior.
Addressing the audience’s queries, Sardana offers insights into investor expectations. While a TAM slide can be beneficial in a pitch deck, she cautions against overreliance on industry metrics. Founders need to showcase their unique insights and deep understanding of the market landscape.
Marketplace TAMs present a particular challenge, as demonstrated by Index Ventures’ decision to pass on Airbnb due to perceived market limitations. Sardana emphasizes the importance of unlocking supply and understanding behavioral shifts in marketplace dynamics.
When asked about standout qualities in a company, Sardana emphasizes the role of founders’ understanding of their customers and their purchasing motivations. Ultimately, investors evaluate founders based on their vision and ambition.
As Sardana aptly puts it, “We’re in the business of evaluating founders more than markets or products. When you talk about your market, it’s really a lens on your ambition.” This reimagined perspective on TAM challenges founders to think beyond existing markets and envision the untapped opportunities that lie ahead.
