Robert Kaminski 🎯’s Post

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Partner @ Fletch | Product Marketing for Early Stage B2B Startups

TAM SAM SOM is broken 💢 Especially for horizontal markets. Markets are far more complex than 3 concentric circles. Take a look at one of Calendly’s target markets. ↳ Sales teams booking meetings w/ prospects. ⚫️ Investor Market Breakdown (Left image) 3 basic definitions of who might buy a meeting booking tool. This is a drastic oversimplification of what the market looks like. And often leads to poor GTM strategies. 🟣 GTM Breakdown (Right image) This is a more accurate depiction of a market — A complex collection of sub-markets. It factors in the nuances that drives different customer behavior: → different industries → different company types → different teams → different situations  → different needs 🔥🔥 So, what does a more realistic view of markets mean for startup founders? 1️⃣ Build better GTM strategies No more blindly following a TAM/SAM/SOM as your market map. Instead, your sales and marketing motions will be rooted in something closer to reality — resulting in campaigns that are: → more targeted → more effective → more predictable 2️⃣ Identify more growth opportunities Even in saturated markets, there will always be underserved segments. You just have to be willing to look for them — and then get specific with your message to reach them. 3️⃣ Less likely to prematurely scale When founders raise money, they get the feeling that they are on their way to becoming a large company. So they start doing “big company things”: ⛔️ Broad ambitious marketing campaigns ⛔️ Moving up market to chase enterprise deals ⛔️ Start building new products Embracing the reality of complex markets will give founders some pause before making these mistakes.  _____ So when planning your GTM, ask yourself… 🤔 Do you have an accurate picture of your market? And remember… Markets are complex. Because markets are made of people. And people are complex. Act accordingly. #startups #marketing #gtm #growth

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Julio C.S. Marques 🇧🇷🇵🇹

Managing Partner Althaéa Gestão | Management

1y

I believe it mixes two different things. They can’t be put at same level of understanding, thus being compared. The TSS should not be considered as segmentation tool. It just estimates market size (and btw very generically). This is just a hint. A drill-down exercise is to understand the market by putting together similar things (segmentation, sub-segs, target public, persona, etc), so that companies can address efficiently their marketing and sales actions. Both are valid. Investors like to see broad picture. So TSS is good. But it wouldn’t survive deeper questions about segmentations and action plans and use of proceeds of my investor money… I wouldn’t spend much of time on TSS, but rather scuba dive into all sort of segmentation (and test my hypotesis).

Uche A.

Focused on being useful to others

1y

TAM/SAM/SOM is really only useful as a conceptual tool. Just as markets involve people (therefore being complex), GTM involves capital (therefore expensive). Except for the (exceedingly) rare case of negligible CAC, only a fool would employ TAM/SAM/SOM as a true GTM strategy. So many real-world steps and cadences are missing to properly mitigate risk, while adjusting one's conceptual understanding in real-time based on actionable feedback. In summary, it's less broken than it is misused. A lot.

Ian Treviranus

Business Transformation Leader | Communications | Technologist | Growth Strategy, Planning, & Delivery

1y

Nice post! This is a useful takedown of the classic TAM model for being too simplistic for GTM planning. I'm curious how you would tackle a different (though related) question typically addressed using the TAM model: how to identify focus areas for hitting strategic objectives? It's data-light (and therefore higher risk) to just look at the TAM model, sure, but how you balance the investment needed to gather data and downsides of being slow to market or the opportunity cost of choosing inefficiently is where a lot of success and failure lives.

P. Darius Vaillancourt

Technology & Impact | Yale MBA

1y

excellent post! Do you think one of these subniches needs to be at least a $1 billion market if you're building a VC-backable co? This way, if you can't move to an adjacent market at least you can dominate a large (i.e. $1 billion) subniche? OR is it OK to start in a say $60 million market (i.e. language learning) with the belief that you'll be able to move into an adjacent market (i.e. business coaching) as long as there is a common problem across the two verticals you are addressing? Asking for a friend.

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Garrett Jestice

Customer Research + GTM Strategy for B2B startups | Founder & CEO @ Prelude Marketing | Former SaaS CMO | BBQ Judge

1y

Preach! When pitching to investors, founders try to describe the biggest market possible for their company. But the exact opposite is needed when it comes to executing a strong GTM. You need to niche down and go as narrow as possible. This is where I see so many startups trip up. After your investor pitch is done throw your TAM/SAM/SOM analysis away and instead niche down with: 2-3 prioritized market segments > ICP attributes > Tiered target account list > In-market, top tier target accounts

Sid Khaitan

Product Marketing @ Beekeeper

1y

Love this! How would you quantify horizontal markets? ACV x accounts that fit your ICP?

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Michael Ho

Series A prep for seed stage founders | former VC & exited founder | Click visit my website to register for the free Unlock your Series A training session 💪

1y

💯 This. Every founder needs to print this out 👀 Investors don't care about your TAM/SAM/SOM - they care about your unique understandings of the reality on the right. Your customers don't care about TAM/SAM/SOM - they care about your unique understandings of the reality on the right 😁 Thank you for bringing attention to this fact Robert ❤️

Rob Litterst

Hubspot Media | Building PricingSaaS

1y

Love the nuance here! Another benefit of getting this granular is it can help reveal verticalized pricing opportunities. Charlie Kline 👀

Mac Reddin 🦕

Want a fun fact about dinosaurs? DM me | Go-to-Network 🦕

1y

This visualization works great for the way sales pipelines, relationships, and network management really work as well. None of those things are linear stages, as much as our tooling would have us work that way. Every business is a complex network of interwoven personal, community, customer, and marketing networks.

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