How to use TAM, SAM, SOM, and ICP to pivot your startup

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PIVOT! Start-ups are insane. Pivots are not unusual, yet at times the pivot doesn't happen fast enough. TAM, SAM, SOM, ICP are not novel concepts. In fact we see an iteration of this in every pitch deck that comes through our inbox at In Revenue Capital. Definitions detour (been told I use too much jargon) TAM: Total addressable market SAM: Service addressable market SOM: Service obtainable market ICP: Ideal customer profile The early days should be about finding the closest thing to an ICP as possible. One of the most common things I see, especially in vertical SaaS which inherently has a smaller TAM, is founders simply say "the entire market is our ICP." False. The entire market could buy from you may be a true statement, maybe not, but what matters early is solving a unique problem so well that buying from you is a complete no brainer for a subset of the market... Your first ICP. Often that is enough to get you to $1M in ARR. Then you may have to Pivot. Maybe it's market change, maybe that cohort was really small (that's OK!), maybe the problem and product expands. The point of this is that those acronyms aren't just things consultants put in a deck... I mean they are things consultants put in a deck, but the reality is the should represent a set a clear set of data points you can use to drive GTM activities. It's another slow down to speed up type of thing. Your TAM represents a broad set of data points. When you start to whittle it down to SAM, SOM and ICP, you add more and more niche data points representing a perfect fit customer. The exercise of capturing those data points and defining their importance to your business provides you toe ability to pivot when needed.

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Check out our Cheat Codes page for frameworks for building Ideal customer and partner profiles https://inrevenue.com/insights/?article_category=cheat-code

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