In episode #2625, We discuss the difference between audience TAM (Total Addressable Market) and revenue TAM. We explain that venture capitalists often look at the total addressable market when investing in companies, leading to higher market caps. However, in business, the focus should be on revenue TAM and the size of the spending market. We provide examples of content that generates a large audience TAM but doesn't drive revenue. We emphasize the importance of understanding when to build reach versus when to convert, and the need to prioritize revenue TAM for business growth.
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Check out more of Eric’s content (Leveling UP YT) and Neil’s videos (Neil Patel YT)
TIME-STAMPED SHOW NOTES:
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(00:00) Today’s topic: Audience TAM vs Revenue TAM
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(00:41) Difference between audience TAM and revenue TAM
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(01:09) Importance of revenue TAM in generating business revenue
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(01:48) Building a personal brand requires a massive audience TAM
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(02:13) Example of Salesforce and their focus on revenue TAM
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(02:41) Difficulty in generating likes for revenue-focused content
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(03:29) Balancing reach and conversion in business strategies
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(03:53) Easier to grow a business with a massive revenue TAM
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(04:11) Understanding when to focus on reach vs conversion
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(04:53) Audience TAM can be a distraction if it does not lead to business outcomes.
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(05:12) That’s it for today! Don’t forget to rate, review, and subscribe!
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