I was 28 and sleepless when I encountered a marketing version of the logistic function. It was beautiful. It’s one of those things you’re taught about in one context, and when you’re shown it from another angle, it expands your mind. It was like discovering Pi for the first time. I could use it to check the assumptions of a market penetration forecast, and substitute my own estimates for others. I felt empowered and delirious from being able to produce a solid forecast. It became a tool as useful as btau or the crosstab. There’s a part of that math, a variable called saturation, that worried me from the outset. Saturation is the maximum percentage of adoption that a market[…]
Tag: tam
What if Total Addressable Market can’t be estimated accurately? What then? What is Total Addressable Market (TAM)? Total Addressable Market, or TAM, is the number of buyers who are Willing To Pay (WTP) for a solution to a problem they have now, or are Willing To Pay (WTP) your firm instead of the firm they’re currently paying to solve a problem. Why is TAM important? TAM determines the life and death of a firm. The leading cause of startup failure, and perhaps all business failure in general, is the failure to penetrate and/or retain TAM (Including bureaucratic capture and rent-seeking). In this context, I’m concerned about the introduction of a new product into the market in an effort to generate both[…]