What Is The Total Addressable Market And How To Assess It

A total addressable market, or TAM is the available market for a product or service. That is a metric usually leveraged by startups to understand the business potential of an industry. Typically, a large addressable market is appealing to venture capitalists willing to back startups with extensive growth potential.


Concept OverviewTotal Addressable Market (TAM) is a business term that represents the total revenue opportunity available for a specific product or service within a defined market. It signifies the maximum potential demand for a product or service if it were to capture 100% of the market share. TAM analysis is a crucial step in market research and business planning as it helps companies understand the scope and size of the market they are targeting.
CalculationCalculating TAM typically involves the following steps:
1. Define the Market: Clearly define the market in terms of product or service category and geographic scope.
2. Determine the Target Customer Base: Identify the total number of potential customers who might be interested in the product or service.
3. Estimate the Average Revenue per Customer: Calculate the average revenue that each customer would generate annually or over a specific period.
4. Multiply the Number of Customers by Revenue: Multiply the estimated number of potential customers by the average revenue per customer to calculate TAM.
ImportanceUnderstanding TAM is crucial for several reasons:
1. Market Sizing: It provides a quantitative measure of the market’s size and potential.
2. Business Planning: Helps in setting realistic revenue targets and growth strategies.
3. Investment Decisions: Attracts investors by showcasing the market opportunity.
4. Competitive Analysis: Assists in evaluating market competition and differentiation strategies.
5. Product Development: Guides product development efforts based on market demand.
Addressable vs. Serviceable vs. Available MarketIn addition to TAM, there are two related concepts:
1. Serviceable Addressable Market (SAM): SAM represents the portion of TAM that a business can realistically serve or target with its products or services. It takes into account factors like geographical limitations, regulatory constraints, and the company’s capacity.
2. Share of Market (SOM): SOM is the percentage of the SAM that a business can capture or currently holds. It’s a more realistic measure of market share, as companies rarely achieve 100% market penetration.
ChallengesDetermining TAM can be challenging due to factors like market segmentation, changing customer preferences, and market dynamics. Overestimating TAM can lead to unrealistic business expectations, while underestimating it may result in missed opportunities for growth.

TAM, SAM, and SOM in a nutshell

When launching or running a business, at the question “who’s your target?” it often happens to hear answers like “everyone can use my product or service.”

This implies a complete misunderstanding of the market.

This can be not good for several reasons.

First, it might make it harder to prioritize and focus on a few key partners who might help the business snowball and scale.

For instance, when PayPal launched, as pointed out by Reed Hoffman in Blitzscaling the company had to shift its focus four times in a short period.

When they identified their power users on eBay, they focused on and prioritized that niche market.

Thus, PayPal first dominated that niche and then moved forward.

Second, if you need external resources, such as lending and financing, being able to present the total addressable market (TAM) is a crucial element to make the value proposition for those investing in your business compelling enough.

For that matter, a few crucial questions, such as who needs your service, how much can I charge for it, and what players are already in that market helps to find a few elements to compute the TAM.

To evaluate a business opportunity, you need to look into three metrics:

  • TAM or total addressable market
  • SAM or serviceable addressable market
  • SOM or serviceable obtainable market

Let’s start with a practical and straightforward example. Imagine the scenario you’re opening a barbershop in Rome.

Now your TAM might be any man in the world with a beard. However, of those, how many can you reach and service?

It would also be great to say that your total serviceable addressable market is those men’s beards.

However, this is not realistic.

Instead, to be realistic, you might start from the neighborhood where your barbershop will be located.

This means that in a population of a hypothetical thousand people in the neighborhood, only 50% are men, and of those men, only 50% have a beard.

This means your total serviceable market is now only two-hundred-fifty men (a thousand divided by two, twice).

Yet, you’re not the only barbershop in the neighborhood. It seems like another person had the same idea, and her barbershop serves already half of those men’s beards.

This means that your potential market share might be 50% of the serviceable market, or a hundred and twenty-five people. This is your SOM.

Although this is a simplified example, that is a good starting point to understand the difference between TAM, SAM, and SOM.

You don’t need to perform complicated analyses to start understanding those concepts.

All you need is to start thinking in realistic terms about who’s that you’re trying to serve!

Case study

Defining the total addressable market is important, especially for companies attracting investors.

In short, in many cases, investors don’t look for the company’s potential growth.

But rather to the company’s potential growth in a growing market and industry.

Thus, guessing the potential market size, especially in growing or rising industries, is critical for most investors.

For instance, this is how Pinterest defined its total addressable market in its S-1:

The global advertising market is projected to grow to $826 billion in 2022 from $693 billion in 2018, representing a 5% compound annual growth rate (“CAGR”), according to IDC. The digital advertising market alone is projected to grow to $423 billion in 2022 from $272 billion in 2018, representing a 12% CAGR, according to IDC. In 2018, the consumer packaged goods (“CPG”) and retail industries accounted for $64 billion of this digital advertising spend, and the travel, technology (includes computing, consumer electronics and telecom), automotive, media & entertainment and financial services industries accounted for an additional $144 billion. The United States continues to represent the largest digital advertising market in the world. The U.S. digital advertising market is projected to grow to $166 billion in 2022 from $104 billion in 2018, representing a 12% CAGR, according to IDC.

Then the company defined its total addressable market and its market opportunity by highlighting the various advertising formats the company delivers (online brand advertising and performance-based advertising).

Your TAM is the BHAG

The notion of a big hairy audacious goal was first introduced by Jim Collins and Jerry Porras in their book Built to Last: Successful Habits of Visionary Companies. A big hairy audacious goal (BHAG) is a clear and compelling long-term goal guided by a company’s values and purpose.

No company will be able to reach its TAM in the short term.

And to be fair, no company should be trying to achieve that.

A company, if adequately reaching scale, ‘ll be able to get close to its TAM or even pass it (there are many assumptions in computing the TAM which might be underestimating it).

For instance, as the story goes, recounted in the book Measure What Matters, author and venture capitalist John Doerr asked Brin and Page, “how big do you think this could be?”

He was referring to Google. This was the fall of 1999.

John Doerr had thought that if everything worked, Google would have reached a market cap of $1 billion.

Yet, when Larry Page responded, “ten billion dollars,” Doerr replied, “you mean a market cap, right?”

Larry Page replied, “no, I don’t mean market cap; I mean revenue.”

At the time, assuming that sort of revenue generation meant reaching the size of companies like Microsoft or IBM, who were the dominant players.

While Doerr was impressed, he was also skeptical about it.

Yet, Google (Alphabet) today is an over trillion-dollar company, with $257.6 billion in revenues!

So both Doerr and Page, two incredibly smart people, were completely off about the TAM.

What does that mean?

Computing TAM is a great exercise to improve your business acumen, but it’s just that, an exercise.

Thus, it’ll be extremely hard to know, over time, how big an industry might get, let alone be able to tackle it all with limited resources.

Your SAM is your scale

Scaling up a business is a game for its own sake.

It’s not just about the product; it’s about the business model and whether that is able to sustain a product to reach its SAM.

So also here, before you can tackle the SAM, you want to start to creating options to scale.

How? From the SOM!

Your SOM is your niche

Any company with restrained resources, but in general, any startup trying to tackle a new market, should start with a niche, and better yet, a micro-niche.

A microniche is a subset of potential customers within a niche. In the era of dominating digital super-platforms, identifying a microniche can kick off the strategy of digital businesses to prevent competition against large platforms. As the microniche becomes a niche, then a market, scale becomes an option.

From there, you want to start tackling your minimum viable audience.

When you tackle a small niche, you enable valuable feedback loops while trying to answer simple questions about the market and from there, create options to scale!

Key Highlights

  • TAM, SAM, and SOM Defined:
    • TAM (Total Addressable Market): Represents the total potential market size for a product or service if it were to capture the entire market demand.
    • SAM (Serviceable Addressable Market): Refers to the portion of the TAM that a company can realistically target and serve with its resources and capabilities.
    • SOM (Serviceable Obtainable Market): Indicates the specific portion of the SAM that a company can reasonably capture and secure as its market share.
  • Importance of Target Market Definition:
    • Avoiding the misconception that “everyone” is the target market is crucial for effective business focus and growth.
    • Identifying a specific target audience helps prioritize efforts and resources.
  • Example: Opening a Barbershop:
    • A practical example of a barbershop in a neighborhood illustrates the concepts of TAM, SAM, and SOM.
    • TAM: All men with beards globally.
    • SAM: Men with beards in the local neighborhood.
    • SOM: The subset of men with beards who haven’t already chosen a competing barbershop.
  • Case Study and Investor Perspective:
    • Investors look at potential growth within a growing market.
    • Pinterest’s example demonstrates how the company defined its TAM based on projected market growth.
  • BHAG and TAM:
    • The concept of a “Big Hairy Audacious Goal” (BHAG) is introduced, suggesting a long-term ambitious goal guided by company values.
    • Companies aim to approach or exceed their TAM with sustained growth.
  • Scale and SAM:
    • Scaling a business involves the interplay of the product, business model, and the ability to reach the SAM.
    • Creating options to scale requires leveraging insights from the SOM.
  • Niche and SOM:
    • Startups and businesses with limited resources should begin with a niche, even a micro-niche, to focus their efforts effectively.
    • A micro-niche can grow into a niche, then a market, enabling scalability.
  • Minimum Viable Audience (MVA):
    • Tackling a small niche allows for valuable feedback loops and understanding market dynamics.
    • Building from an MVA provides insights and options for future scaling.

Case Studies

CompanyIndustryTotal Addressable Market (TAM) BreakdownAnalysis
AmazonE-commerceAmazon’s TAM includes online retail, third-party seller transactions, and cloud computing services (AWS).Amazon’s TAM is vast, covering online retail, marketplace services, and cloud infrastructure.
GoogleOnline AdvertisingGoogle’s TAM encompasses the digital advertising space, including search ads, display ads, and YouTube ads.Google dominates the digital advertising market, benefiting from its search and video platforms.
TeslaElectric VehiclesTesla’s TAM involves the global market for electric vehicles, including passenger cars, trucks, and sustainable energy solutions.Tesla aims to capture a share of the growing electric vehicle market, driven by environmental concerns.
MicrosoftCloud ComputingMicrosoft’s TAM includes cloud services like Azure, productivity software (Office 365), and enterprise solutions.Microsoft competes in the expanding cloud computing market, serving businesses’ digital transformation needs.
NetflixStreaming EntertainmentNetflix’s TAM comprises the global streaming entertainment sector, covering movies, TV series, and original content.Netflix focuses on providing a wide range of streaming entertainment options to a global audience.
AirbnbAccommodation RentalAirbnb’s TAM spans the worldwide lodging industry, including vacation rentals, short-term stays, and unique accommodations.Airbnb offers a platform for travelers to find unique accommodations, disrupting the traditional hotel industry.
UberRide-Hailing and DeliveryUber’s TAM covers ride-hailing services for passengers and food delivery services, targeting urban transportation and convenience.Uber aims to provide accessible transportation and delivery services to a wide range of customers.
Facebook (Meta)Social MediaFacebook’s TAM includes the social media landscape, offering a platform for users to connect and share content, supported by advertising.Facebook’s primary revenue source is advertising, leveraging its large user base for ad targeting.
Zoom VideoVideo ConferencingZoom’s TAM expanded rapidly with the surge in remote work and virtual meetings, catering to businesses and individuals needing video communication.Zoom Video became essential for remote communication during the COVID-19 pandemic, contributing to its growth.
SalesforceCustomer Relationship ManagementSalesforce’s TAM focuses on businesses seeking CRM and cloud solutions to manage customer relationships and drive growth.Salesforce offers a suite of CRM tools and cloud services to support businesses’ sales and customer management efforts.
Alibaba GroupE-commerce and TechnologyAlibaba’s TAM includes e-commerce, cloud computing, digital payments, and various technology services, primarily targeting the Asian market.Alibaba has a diverse range of businesses, serving both consumers and enterprises across multiple sectors.
AppleConsumer ElectronicsApple’s TAM encompasses the global market for smartphones, tablets, computers, wearables, and services like the App Store and Apple Music.Apple aims to provide a seamless ecosystem of products and services, fostering brand loyalty.
LinkedInProfessional NetworkingLinkedIn’s TAM targets professionals, businesses, and recruiters seeking networking, job opportunities, and talent solutions.LinkedIn is a valuable platform for professionals to connect, build their careers, and explore job opportunities.
SpaceXSpace ExplorationSpaceX’s TAM spans satellite deployment, space travel, and future exploration missions, focusing on the commercialization of space and reducing launch costs.SpaceX aims to make space more accessible and cost-effective for various applications, including satellite internet.
RobinhoodStock TradingRobinhood’s TAM includes retail investors seeking easy access to stock trading, cryptocurrencies, and investment opportunities.Robinhood introduced commission-free stock trading, attracting a new generation of retail investors.
DoorDashFood DeliveryDoorDash’s TAM comprises the food delivery services sector, catering to customers looking for convenient meal delivery options from local restaurants.DoorDash operates in a competitive food delivery market, offering a range of dining options to consumers.
Airbnb ExperiencesTravel ExperiencesAirbnb Experiences’ TAM focuses on travelers seeking unique activities and experiences, ranging from tours and workshops to cultural events.Airbnb Experiences aims to provide travelers with memorable and immersive activities hosted by local experts.
CourseraOnline EducationCoursera’s TAM targets learners seeking online courses, certifications, and skill development opportunities in various fields and industries.Coursera offers a platform for online education, partnering with universities and institutions to provide quality courses.
YelpBusiness ReviewsYelp’s TAM includes consumers looking for business reviews and recommendations, as well as businesses seeking online presence and marketing solutions.Yelp provides a platform for businesses to engage with customers and for users to discover local businesses and services.
LinkedIn Talent SolutionsRecruitment and TalentLinkedIn Talent Solutions’ TAM focuses on businesses seeking recruitment tools and solutions to attract and hire talent effectively.LinkedIn Talent Solutions offers tools to connect businesses with potential candidates and streamline the hiring process.
SquarePayment ProcessingSquare’s TAM covers payment processing solutions for small businesses, including point-of-sale hardware, online payments, and financial services.Square simplifies payment processing for small businesses, offering a range of tools to manage transactions and finances.
Salesforce Marketing CloudMarketing AutomationSalesforce Marketing Cloud’s TAM includes businesses looking for marketing automation, analytics, and customer engagement solutions to enhance their digital marketing efforts.Salesforce Marketing Cloud aims to help businesses create personalized marketing campaigns and improve customer engagement.
Booking.comTravel’s TAM focuses on travelers seeking accommodations, flights, car rentals, and travel packages through its online travel agency offers a one-stop platform for travelers to plan and book various travel-related services.
AdobeCreative SoftwareAdobe’s TAM targets creative professionals and businesses seeking digital media, design, and marketing software solutions for content creation and management.Adobe’s suite of creative software and digital marketing tools is widely used for content creation and marketing campaigns.
ExpediaOnline Travel BookingExpedia’s TAM includes travelers looking to book hotels, flights, vacation packages, and other travel-related services through its online travel agency platform.Expedia simplifies the process of planning and booking trips by offering a wide range of travel options.
HubSpotInbound MarketingHubSpot’s TAM focuses on businesses seeking inbound marketing, sales automation, and customer relationship management (CRM) solutions.HubSpot offers a suite of tools to attract, engage, and delight customers, driving inbound marketing efforts.
HomeAway (Vrbo)Vacation RentalHomeAway (Vrbo) serves travelers seeking vacation rental accommodations worldwide, including cabins, beach houses, and apartments.HomeAway (Vrbo) provides a platform for travelers to find unique and spacious vacation rentals.
SurveyMonkeySurvey and Data InsightsSurveyMonkey’s TAM includes businesses, researchers, and organizations seeking survey creation and data analysis tools to gather insights and make data-driven decisions.SurveyMonkey simplifies the process of conducting surveys and analyzing data to gain valuable insights.
DropboxCloud Storage and SharingDropbox’s TAM targets individuals, teams, and businesses looking for cloud storage and file-sharing solutions to collaborate and access files from anywhere.Dropbox offers a user-friendly platform for storing, sharing, and syncing files, enhancing collaboration.
SlackTeam CollaborationSlack’s TAM focuses on businesses and teams seeking efficient team collaboration, messaging, and communication tools to streamline workflows.Slack enhances team communication and collaboration by providing a centralized platform for messages and file sharing.
Airbnb for WorkCorporate TravelAirbnb for Work’s TAM includes businesses looking for accommodations and experiences for corporate travel, team-building, and meetings.Airbnb for Work caters to the needs of businesses seeking alternative accommodation options for employees.
UdemyOnline LearningUdemy’s TAM targets learners and professionals seeking online courses and skill development opportunities across a wide range of subjects and industries.Udemy offers a vast marketplace of courses taught by instructors worldwide, catering to diverse learning needs.
Yelp for BusinessBusiness AdvertisingYelp for Business’ TAM includes local businesses seeking online advertising, marketing, and customer engagement solutions to reach and attract customers.Yelp for Business helps local businesses enhance their online presence and connect with potential customers.
StockXSneaker and CollectiblesStockX’s TAM focuses on collectors and enthusiasts looking to buy and sell authenticated sneakers, streetwear, electronics, and collectible items.StockX provides a platform for individuals to engage in the resale market for highly sought-after items.
PoshmarkFashion ResalePoshmark’s TAM includes fashion enthusiasts looking to buy and sell gently used clothing, accessories, and fashion items in various styles.Poshmark offers a community-driven marketplace for fashion resale, promoting sustainability and style.
ThumbtackLocal ServicesThumbtack’s TAM targets individuals and businesses seeking local service professionals for various tasks and projects, from home improvement to event planning.Thumbtack simplifies the process of finding and hiring local service professionals for diverse needs.
TuroPeer-to-Peer Car RentalTuro’s TAM includes travelers and car owners looking for peer-to-peer car rentals, enabling individuals to rent their vehicles or book unique cars.Turo offers a platform for individuals to share and rent vehicles, creating a peer-to-peer car rental marketplace.
99designsDesign Services99designs’ TAM focuses on businesses and individuals seeking design services through crowdsourcing, including logo design, graphic design, and web design.99designs hosts design contests, allowing businesses to receive custom designs from a global community of designers.
Salesforce Commerce CloudE-commerce SolutionsSalesforce Commerce Cloud’s TAM targets businesses looking for e-commerce solutions, including online storefronts, digital marketing, and order management capabilities.Salesforce Commerce Cloud provides a comprehensive e-commerce platform to support businesses in their online retail efforts.
TaskRabbitOn-Demand Task ServicesTaskRabbit’s TAM includes individuals and businesses looking for on-demand taskers to complete various tasks and projects, from home repairs to deliveries.TaskRabbit simplifies the process of finding skilled taskers to handle a wide range of tasks efficiently.
UpworkFreelance Talent MarketplaceUpwork’s TAM focuses on businesses and individuals seeking freelance talent for a variety of projects and services, spanning from web development to content creation.Upwork connects freelancers with clients seeking specific skills, offering a diverse marketplace for freelance work.
Facebook MarketplaceOnline MarketplaceFacebook Marketplace’s TAM includes individuals and businesses looking to buy and sell a wide range of new and used items, from electronics to furniture.Facebook Marketplace provides a convenient platform for local and online buying and selling within communities.

Additional Case Studies for TAM, SAM, SOM

Apple Inc.Global market for consumer electronicsConsumers and businesses in developed and developing countriesCustomers who purchase Apple products and services Inc.Global e-commerce and cloud computingOnline shoppers, businesses, and organizationsAmazon Prime subscribers, AWS customers, and marketplace sellers
Google LLCGlobal internet search, advertising, and cloud servicesInternet users and businesses seeking digital advertisingGoogle Ads advertisers, G Suite users, and Cloud Platform customers
Microsoft CorporationGlobal software, hardware, and cloud servicesEnterprises, governments, and individual consumersWindows OS users, Office 365 subscribers, Azure cloud customers
Facebook, Inc.Global social media and digital advertisingSocial media users, businesses, and advertisersFacebook, Instagram, WhatsApp, and Messenger users
Alphabet Inc. (Google’s Parent)Global internet-related servicesInternet users, businesses, and advertisersGoogle search users, YouTube viewers, and GCP clients
Tesla, Inc.Global electric vehicle and clean energy marketsCar buyers interested in electric vehiclesTesla car owners and solar energy customers
Netflix, Inc.Global streaming entertainment marketInternet users seeking on-demand video contentNetflix subscribers
Uber Technologies, Inc.Global ride-sharing and food delivery marketUrban and suburban commuters, restaurant-goersUber riders and Uber Eats customers, Inc.Global customer relationship management (CRM) marketBusinesses and organizations of all sizesSalesforce CRM and cloud service subscribers
Airbnb, Inc.Global short-term lodging and vacation rental marketTravelers and property ownersAirbnb hosts and guests
Adobe Inc.Global software for creativity, marketing, and documentsCreative professionals, marketers, and enterprisesAdobe Creative Cloud and Document Cloud users
PayPal Holdings, Inc.Global digital payments and financial servicesOnline shoppers, businesses, and freelancersPayPal and Venmo users
Twitter, Inc.Global social media and microblogging marketIndividuals, businesses, and advertisersTwitter users and advertisers
Snap Inc. (Snapchat)Global multimedia messaging and AR technologySocial media users, advertisers, and AR enthusiastsSnapchat users and Discover content consumers
Spotify Technology S.A.Global music streaming and podcast marketMusic lovers and podcast enthusiastsSpotify Premium and Free users
Alibaba Group Holding LimitedGlobal e-commerce, cloud computing, and fintechOnline shoppers, businesses, and financial, Taobao, and Tmall users
Tencent Holdings LimitedGlobal internet services, gaming, and social mediaGamers, social media users, and online shoppersWeChat, QQ, and Honor of Kings players
Square, Inc.Global financial services, mobile payments, and POS systemsSmall businesses, retailers, and service providersSquare payment and hardware users
Zoom Video Communications, Inc.Global video conferencing and virtual collaborationBusinesses, educational institutions, and remote workersZoom Meetings and Webinars participants

Related Market Development Frameworks


A total addressable market or TAM is the available market for a product or service. That is a metric usually leveraged by startups to understand the business potential of an industry. Typically, a large addressable market is appealing to venture capitalists willing to back startups with extensive growth potential.

Niche Targeting

A microniche is a subset of potential customers within a niche. In the era of dominating digital super-platforms, identifying a microniche can kick off the strategy of digital businesses to prevent competition against large platforms. As the microniche becomes a niche, then a market, scale becomes an option.

Market Validation

In simple terms, market validation is the process of showing a concept to a prospective buyer and collecting feedback to determine whether it is worth persisting with. To that end, market validation requires the business to conduct multiple customer interviews before it has made a significant investment of time or money. A transitional business model is an example of market validation that helps the company secure the needed capital while having a market reality check. It helps shape the long-term vision and a scalable business model.

Market Orientation

Market orientation is an approach to business where the company focuses more on the behaviors, wants, and needs of customers in its market. A company will first target a niche market to prove a commercial use case. And from there, it will create options to scale.

Market-Expansion Strategy

In a tech-driven business world, companies can move toward market expansion by creating options to scale via niches. Thus leveraging transitional business models to scale further and take advantage of non-linear competition, where today’s niches become tomorrow’s legacy players.

Stages of Digital Transformation

Digital and tech business models can be classified according to four levels of transformation into digitally-enabled, digitally-enhanced, tech or platform business models, and business platforms/ecosystems.

Platform Business Model Strategy

A platform business model generates value by enabling interactions between people, groups, and users by leveraging network effects. Platform business models usually comprise two sides: supply and demand. Kicking off the interactions between those two sides is one of the crucial elements for a platform business model success.

Business Platform Theory


Business Scaling

Business scaling is the process of transformation of a business as the product is validated by wider and wider market segments. Business scaling is about creating traction for a product that fits a small market segment. As the product is validated it becomes critical to build a viable business model. And as the product is offered at wider and wider market segments, it’s important to align product, business model, and organizational design, to enable wider and wider scale.

Strategy Lever Framework

Developing a successful business strategy is about finding the proper niche, where to launch an initial version of your product to create a feedback loop and improve fast while making sure not to run out of money. And from there create options to scale to adjacent niches.

FourWeekMBA Business Toolbox

Business Engineering


Tech Business Model Template

A tech business model is made of four main components: value model (value propositions, missionvision), technological model (R&D management), distribution model (sales and marketing organizational structure), and financial model (revenue modeling, cost structure, profitability and cash generation/management). Those elements coming together can serve as the basis to build a solid tech business model.

Web3 Business Model Template

A Blockchain Business Model according to the FourWeekMBA framework is made of four main components: Value Model (Core Philosophy, Core Values and Value Propositions for the key stakeholders), Blockchain Model (Protocol Rules, Network Shape and Applications Layer/Ecosystem), Distribution Model (the key channels amplifying the protocol and its communities), and the Economic Model (the dynamics/incentives through which protocol players make money). Those elements coming together can serve as the basis to build and analyze a solid Blockchain Business Model.

Asymmetric Business Models

In an asymmetric business model, the organization doesn’t monetize the user directly, but it leverages the data users provide coupled with technology, thus have a key customer pay to sustain the core asset. For example, Google makes money by leveraging users’ data, combined with its algorithms sold to advertisers for visibility.

Business Competition

In a business world driven by technology and digitalization, competition is much more fluid, as innovation becomes a bottom-up approach that can come from anywhere. Thus, making it much harder to define the boundaries of existing markets. Therefore, a proper business competition analysis looks at customer, technology, distribution, and financial model overlaps. While at the same time looking at future potential intersections among industries that in the short-term seem unrelated.

Technological Modeling

Technological modeling is a discipline to provide the basis for companies to sustain innovation, thus developing incremental products. While also looking at breakthrough innovative products that can pave the way for long-term success. In a sort of Barbell Strategy, technological modeling suggests having a two-sided approach, on the one hand, to keep sustaining continuous innovation as a core part of the business model. On the other hand, it places bets on future developments that have the potential to break through and take a leap forward.

Transitional Business Models

A transitional business model is used by companies to enter a market (usually a niche) to gain initial traction and prove the idea is sound. The transitional business model helps the company secure the needed capital while having a reality check. It helps shape the long-term vision and a scalable business model.

Minimum Viable Audience

The minimum viable audience (MVA) represents the smallest possible audience that can sustain your business as you get it started from a microniche (the smallest subset of a market). The main aspect of the MVA is to zoom into existing markets to find those people which needs are unmet by existing players.

Business Scaling

Business scaling is the process of transformation of a business as the product is validated by wider and wider market segments. Business scaling is about creating traction for a product that fits a small market segment. As the product is validated it becomes critical to build a viable business model. And as the product is offered at wider and wider market segments, it’s important to align product, business model, and organizational design, to enable wider and wider scale.

Market Expansion Theory

The market expansion consists in providing a product or service to a broader portion of an existing market or perhaps expanding that market. Or yet, market expansions can be about creating a whole new market. At each step, as a result, a company scales together with the market covered.



Asymmetric Betting


Growth Matrix

In the FourWeekMBA growth matrix, you can apply growth for existing customers by tackling the same problems (gain mode). Or by tackling existing problems, for new customers (expand mode). Or by tackling new problems for existing customers (extend mode). Or perhaps by tackling whole new problems for new customers (reinvent mode).

Revenue Streams Matrix

In the FourWeekMBA Revenue Streams Matrix, revenue streams are classified according to the kind of interactions the business has with its key customers. The first dimension is the “Frequency” of interaction with the key customer. As the second dimension, there is the “Ownership” of the interaction with the key customer.

Revenue Modeling

Revenue model patterns are a way for companies to monetize their business models. A revenue model pattern is a crucial building block of a business model because it informs how the company will generate short-term financial resources to invest back into the business. Thus, the way a company makes money will also influence its overall business model.

Pricing Strategies

A pricing strategy or model helps companies find the pricing formula in fit with their business models. Thus aligning the customer needs with the product type while trying to enable profitability for the company. A good pricing strategy aligns the customer with the company’s long term financial sustainability to build a solid business model.

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