Startup founders are constantly chasing TAM — the Total Addressable Market — as a key concept in validating and scaling their ideas. But according to Jahanvi Sardana, a partner at Index Ventures, founders shouldn’t become overly obsessed with it. Many successful startups, she reminds us, were born out of markets that didn’t even exist at the time.
“What was the market for search before Google?” Sardana asked during her talk at TechCrunch’s 2025 All Stage event, held earlier this month in Boston. “What was the market for operating systems before Microsoft, or for cloud before Amazon?”
Sardana compares TAM to surfing: every few years, massive waves arrive — first the internet, then mobile, then the cloud. Now, she says, we’re facing the biggest wave yet: artificial intelligence.
“Have you shaped the right product to ride this wave?” she asked. “That’s what we call product-market fit.”
Which TAM category are you in?
Sardana breaks TAM into three main buckets: known market, emerging market, and invisible market.
The known market already exists. Here, a founder tries to disrupt legacy players and must convince investors why their product is better. “Everyone brushes their teeth,” Sardana said. “So, explain why you’re building a better toothbrush.”
The emerging market refers to an area where a niche or early market has started using a product, but mass adoption has yet to occur. “Think about non-alcoholic beer before it became cool,” Sardana said.
The invisible market, she warns, is both “the biggest trap” and “a bit of a dark art.” It doesn’t exist yet — so the founder must create it and persuade investors of its potential. “Think about smartphones in 2006 — nobody knew they wanted them, yet they changed the world,” she said. “Sometimes, people don’t know what they want — and you have to show them what’s possible.”
What do investors actually want to see?
During her session, the audience — mostly early-stage founders — asked Sardana what investors really want. For example, should a pitch deck include a TAM slide?
“It’s okay to create that slide and walk through the math behind your TAM,” she said. “But investors can get frustrated when founders rely too much on generic industry metrics instead of offering their own point of view.” She cautioned against over-depending on third-party reports: “If you can’t define the market yourself, it suggests you haven’t thought deeply about what you’re building.”
What if you get the market size wrong?
“How do you size the TAM for marketplaces?” one attendee asked. Sardana responded with a smile: “That question stings.” She recalled how Index Ventures once passed on Airbnb, believing its TAM was too small.
But Airbnb went on to invent a new category of inventory — one that eventually outgrew many of the world’s largest hotel brands. “When assessing marketplace TAMs, think about unlocking supply,” she said. “Once you do that, how will behavior change?”
What makes a startup stand out?
So what actually makes a startup compelling to investors like Sardana?
“That’s a tough one — but an important one,” she admitted. Ultimately, she explained, it’s about whether the founder truly understands who their customer is and why that customer is willing to pay.
“We’re in the business of evaluating founders more than markets or products,” she said. “When you talk about your market, you’re really talking about your ambition.”
