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Demystifying Startup Math: A Guide to TAM, Metrics, and Business Growth

Prime Venture Partners Podcast

CHAPTER

What Makes for an Attractive TAM?

Clear segment, clear willingness to pay. Second order thinking is the ability to reach those customers. My simplest rule of thumb that we share with the team at Prime internally is if you're going to need like a PhD degree to compute TAM is probably not a good TAM. The simpler the model in terms of usually like I'd say fitted in one line with 40 point calibrate font, right? saying x multiplied by y multiplied by z unambiguously is a billion dollar market or a half a billion dollars market or a five billion dollar market.

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