Hi there,

When evaluating a new business — whether it's a big co or a startup — how important is TAM (total addressable market)?    

Opinions vary quite a bit among both operators & investors, with technology investors tending to have the most divergent (and strongest) opinions.

Many investors say they don’t look at TAM for new markets, because it's often too small or undefined to even be interesting or valuable. In these cases, doing any sort of TAM analysis is actually misleading and will make you overlook opportunities. What was the TAM for something like Airbnb (couch surfing) or Amazon (books) when they started?

On the flip side are many investors who view the market as critical and perhaps the top dimension when evaluating a company. In this camp is Philippe Laffont, the founder of Coatue. In a great tweetstorm on Coatue’s investment in Meituan (think of it as a Chinese version of DoorDash or Uber Eats), he writes about how private market investing can benefit public market investing. He specifically discusses TAM here:

The full thread is linked in The Blurb.

OG of the tech world, Marc Andreessen, also talks about the importance of market selection in his essay “The only thing that matters” (linked in The Blurb also). In summary, Andreessen asserts that when in doubt, the market wins.

Warren Buffett also gives a nod to the importance of market selection in this great quote below. More on Buffett’s shareholder letter wisdom here.

Whether you are an investor or operator, how important is TAM in your view?

For those looking for a quick way to understand TAM, check out our market sizing tool here.

Doctor, doctor — give me the news

Family doctors play a critical role in patient care. But for years, access to primary care has been limited — an estimated 83M Americans live in medically underserved areas.

From routine physicals to medication adherence to remote monitoring, we take a look at how startups are disintermediating and transforming the traditional family doctor experience here.

Not-so-new kids on the block

Some of the highlights of our first-ever Blockchain 50 list include: 

• More than $3B in aggregate equity funding across 113 deals since 2017

• Global representation, with 40% of winners based outside the US

• More deals from corporate VC investors than traditional VCs

See the rest of the insights and which companies made the cut here.

Smell ya later

Interest in aromatherapy and fragrance climbed to record levels in 2020, with home scents leading the charge.

Wall Street Journal. Brian Gormley uses CB Insights data and quotes CBI senior intelligence analyst Marissa Schlueter (@mschlueter13) in covering the telehealth industry’s momentum.

Fast Company. Mark Sullivan (@thesullivan) interviews experts about tech trends in 2021, quoting CB Insights managing analyst Thomas Sineau (@TSineau). 

CNBC. Cameron Costa (@CameronCostaNY) discusses the unicorns created in 2020 and references CB Insights research.

P.S. We're looking for a lead recruiter. Check out the job here.

The Blurb

Get’cha head in the game. Patience and imagination: how the private market mindset can help public equity investors.

Twitter

Mark my words. The most important factor in a startup’s success or failure is market — not team or product.

The Pmarca Guide to Startups

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