As investors, we’re considering the total addressable market for a given product or service immediately upon hearing a vision for it: How many users and/or customers are there for this?
Slapping billions or tens of billions of dollars with a title and maybe an asterisk-attributed source on a slide will either be glossed over or, in some cases, actually be detrimental. Every VC has seen multi-billion dollar market size slides many times over; what a founder intends as a “wow” slide draws skepticism that a market is as big as stated. Diligent investors will do the work on their own to arrive at a market size for a startup.
In doing so, I usually consider three types of potential markets.
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