Index Ventures’ Jahanvi Sardana Shares The Truth About Tam And What Founders Should Focus On Instead

Early-stage founders conscionable can’t get distant from TAM — nan conception of having a full addressable marketplace for their startup to disrupt and conquer. But Index Ventures partner Jahanvi Sardana has a reminder for each those founders worried astir uncovering TAM for their merchandise aliases service: galore startups person emerged from markets that, astatine nan time, were fundamentally nonexistent.

“What was nan marketplace for hunt earlier Google?” Sardana asked nan assemblage astatine TechCrunch’s 2025 All Stage arena successful Boston, held earlier this month. “What was nan marketplace for operating systems earlier Microsoft, aliases nan marketplace for unreality earlier Amazon?” 

Sardana compares TAM to surfing. Every fewer years, location are monolithic waves founders must thrust — first came nan internet, past nan mobile wave, past nan cloud, and now, she said, nan biggest activity of all: artificial intelligence. 

“Have you shaped nan correct merchandise to thrust this wave?” she continued. “That’s what we telephone merchandise marketplace fit.” 

Which TAM bucket are you in?

Sardana places TAM into 3 buckets: known market, emerging market, and invisible market. 

The first, known market, already exists, and it is erstwhile a laminitis seeks to switch a bequest incumbent and must beryllium to an investor why their startup thought is better. 

“Everyone brushes their teeth,” she said. “You person to show maine why you’re building a amended toothbrush.” 

The emerging marketplace is erstwhile a definite assemblage of nan marketplace is utilizing a product, and location is imaginable for it to spell mainstream.

“Think astir non-alcoholic brew earlier it became cool,” Sardana said. 

Then location is nan invisible market, which Sardana calls “the biggest trap,” and “also a small spot of a acheronian art.” 

The marketplace doesn’t exist, and a laminitis has to fundamentally create nan 1 and supply investors pinch grounds of really innovative they tin be. 

“Think astir smartphones successful 2006, cipher knew they wanted them and they changed nan world,” she said, later adding that “people don’t cognize what they’re looking for and sometimes you person to show them what’s possible.” 

The assemblage astatine All Stage, galore of whom are early-stage founders, peppered Sardana pinch questions, mostly astir what investors want to see. For instance, do investors want to spot a TAM descent successful a transportation deck? 

“It’s OK to create that descent and talk astir nan mathematics down your TAM,”  Sardana said, though she added that sometimes investors get irritated erstwhile founders trust excessively overmuch connected manufacture metrics alternatively than having their ain unsocial insight. Sardana besides cautioned founders not to trust excessively overmuch connected manufacture reports. If a laminitis is excessively limited connected an outer work to dictate really they deliberation astir nan market, it tin awesome that they haven’t thought profoundly astir nan marketplace they are trying to build in, she commented.

“How do you size nan TAM successful nan marketplaces, particularly large marketplaces?” 1 assemblage personnel asked.

Well, that mobility hurts, Sardana quipped. After all, Index erstwhile passed connected Airbnb, having believed its TAM was excessively small. 

“The reality is Airbnb created a full caller inventory, which is now bigger than immoderate of nan largest edifice brands, and that led to a large alteration successful behaviour connected really group travel,” she said, adding that marketplace TAMs are tricky. “You want to attraction on, again, what is unlocking supply, and erstwhile you unlock nan supply, really will behaviour change?” 

The assemblage besides asked Sardana what makes a institution guidelines retired to an investor for illustration herself. 

A reliable one, Sardana said, but a really important one. Ultimately, if a laminitis tin understand who nan customer is and why they are consenting to acquisition their product, past a institution should person nary problem opinionated up to investors, she added.

“We’re successful nan business of evaluating founders much than markets aliases products aliases thing else,” she said. “When you talk astir your market, it’s really a lens connected your ambition.”