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Index Ventures’ Jahanvi Sardana shares the truth about TAM and what foundersshould focus on instead
At TechCrunch’s 2025 All Stage event, Index Ventures’ Jahanvi Sardana advised early-stage founders on moving beyond total addressable market (TAM) fears, stressing the importance of product-market fit and innovation over market size. She outlined three TAM categories: known, emerging, and invisible markets, urging founders to focus on understanding their customers and creating demand rather than relying solely on existing metrics.
Key points
- Sardana reminds founders that many successful startups emerge from previously non-existent markets.
- Examples include Google (search), Microsoft (operating systems), and Amazon (cloud), illustrating the transformative nature of innovation.
- She compares riding TAM's evolution to surfing, identifying AI as the current wave that entrepreneurs should capitalize on.
- TAM is classified into three buckets: known market (existing competitors), emerging market (growing sectors), and invisible market (creating new demand).
- Founders should not overly rely on industry reports as it may indicate a lack of deep market understanding.
- Sardana emphasizes the importance of understanding customer needs to secure investor interest.
Why it matters
- The discussion around TAM ties into broader trends in the startup ecosystem, particularly with the rise of emerging technologies like AI.
- Historically, innovation has often created markets (e.g., smartphones), aligning with the ongoing acceleration of tech disruptions.
- The growth of non-traditional sectors, such as non-alcoholic beer, reflects emerging consumer preferences and market changes.
Ultimately, Jahanvi Sardana encourages founders to prioritize customer insight and innovation over relying solely on TAM, highlighting the transformative potential of understanding and meeting unrecognized market needs.