TAM SAM SOM is broken

💢 Especially for horizontal markets.

Markets are far more complex than 3 concentric circles.

Take a look at one of Calendly’s target markets.

↳ Sales teams booking meetings w/ prospects.

⚫️ Investor Market Breakdown

(Left image)

3 basic definitions of who might buy a meeting booking tool.

This is a drastic oversimplification of what the market looks like.

And often leads to poor GTM strategies.

🟣 GTM Breakdown

(Right image)

This is a more accurate depiction of a market — A complex collection of sub-markets.

It factors in the nuances that drives different customer behavior:

→ different industries

→ different company types

→ different teams

→ different situations

→ different needs

🔥🔥 So, what does a more realistic view of markets mean for startup founders?

1️⃣ Build better GTM strategies

No more blindly following a TAM/SAM/SOM as your market map.

Instead, your sales and marketing motions will be rooted in something closer to reality — resulting in campaigns that are:

→ more targeted

→ more effective

→ more predictable

2️⃣ Identify more growth opportunities

Even in saturated markets, there will always be underserved segments.

You just have to be willing to look for them — and then get specific with your message to reach them.

3️⃣ Less likely to prematurely scale

When founders raise money, they get the feeling that they are on their way to becoming a large company.

So they start doing “big company things”:

⛔️ Broad ambitious marketing campaigns

⛔️ Moving up market to chase enterprise deals

⛔️ Start building new products

Embracing the reality of complex markets will give founders some pause before making these mistakes.

_____

So when planning your GTM, ask yourself…

🤔 Do you have an accurate picture of your market?

And remember…

Markets are complex.

Because markets are made of people.

And people are complex.

Act accordingly.