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Brigid O’Brien has seen her portion of pitches from founders , and she has a content for many of them : Not every investor will be impress by your monolithic TAM , short for total addressable market .
“ Often mass are chase big tam-o'-shanter , which make a lot of sense , because we ’re investing in venture capital , so we ’re looking for oversize returns , ” O’Brien , a cooperator at RA Capital Planetary Health , enjoin atTechCrunch Disrupt 2024 . “ You need to have a market that can help endorse that . ”
“ That ’s in all probability one of the favorite slides a lot of hoi polloi like to do on a sales talk deck , ” she said . “ I ’ve see a lot of pitch deck of cards that have a trillion - dollar TAM . Sometimes I see $ 100 trillion . ”
But that thinking can also lead father astray , O’Brien added .
“ I often say to founders , really be knowing about what your market place entry is in a grocery store . Sometimes chasing the biggest TAM is n’t necessarily the first step on your journeying build a society . remember about where you have the probable and gamy chance of market entry to generate revenue . And then you may also go and furrow that larger TAM later by being able to have that Johnny Cash to help capitalize your company and de - risk some of the tech . ”
By means of example , O’Brien pointed to the approach lead by fellow panelist , Gurinder Nagra , co - founder and CEO of Furno Materials . The inauguration is building diminished , modular kiln that bring forth cement with a much lower climate impact . They stand in stark contrast to the massive , $ 1 billion kilns that have become the standard among industriousness officeholder .
“ What the officeholder have been really good at is building really orotund working capital - acute assets , which have been their moats for the last 100 twelvemonth , ” Nagra said . “ But in an environment where you ask to deepen , that all of a sudden becomes a weakness . So how can you leverage that as a inauguration ? Because speed is your advantage . ”
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But rather than confront incumbents lead on , Furno is starting by finding customers in market that are presently underserved by cementum producer .
“ We did boots on the ground travelling and trip and talked to some of these concrete producer . And sure enough , they ’re like , ‘ I keep catch unallocated cement . I got some last week , but I did n’t get it this hebdomad . ’ Because they ’re not a anteriority . They ’re a small - exfoliation customer , ” Nagra said .
Eventually , when the company has established itself , it ’s likely it ’ll begin wooing customers who already have cementum supplying contracts with officeholder . “ There ’s not much loyalty in the cement business , ” he sound out .
