TAM is wrong for transformational emerging tech innovation: Do this instead
““For truly transformational innovation, markets are hard to size. And often the bigger question is whether people will actually use your product.””
This was the standout quote for me at Austin Tech Week (paraphrased from a Q&A with celebrated startup founder, investor, and educator Gordon Daugherty). It rings very true with my experience in the world of emerging tech product innovation.
It’s not that the size of the market doesn’t matter; it’s more that it’s incredibly hard to measure something that doesn’t exist yet.
Getting to product/market fit in a novel space is incredibly iterative. You’ll modify your product countless times; you’ll almost certainly pivot your audience as well (probably more than once).
While it’s helpful to know which markets, broadly, have budget to spend, calculating your specific TAM (“Total Addressable Market”) upfront, based on an untested vision of your customer, is guaranteed to be inaccurate and, if anything, gives you false confidence.
To Gordon’s point, the better question for highly innovative product teams to ask is: will people actually use this?
This is not a question you answer through market analysis, secondary research, surveys, or even your own lived experience.
You answer it through careful study of people’s habits, prior tech, and workarounds; through real-world prototyping; and through focused experimentation with true MVPs.
It’s admittedly more involved than market sizing. But seeing customers excited about a groundbreaking solution to their painful problem is far more thrilling than a billion-dollar TAM. And it was nice to see a respected investor publicly promoting this approach. ✨
If you’re leading design or development of an innovative product or service, here are three ways I can help you:
💡 Conducting market or user research to inform your product strategy (like understanding if people will use your product!)
🧪 Training your team on research and innovation methods
🎯 Targeted problem-solving for your customer discovery and validation processes