“Great pitch, but I want to understand the market opportunity now. What is your SOM?” – VC Investor
Let’s Take An Example
The Airbnb Illustration
Original pitch decks Airbnb founders used to raise their first round have been published a few years ago.
As you can see, the page is very easy to understand. Airbnb is saying that they hoped to capture 84 million trips over three years, or 15% of the serviceable available market (defined as “Budget & Online Trips”).
No doubt the startup’s founders had to explain why they felt so confident to financial investors they pitched this page to.
Yet, the visually clear rendering, coupled to the efficient research, makes VCs want to know more.
Why Do VCs Care So Much?
We have a whole online module dedicated to the Market page in pitch decks, including a video by legendary Sequoia Capital founder Don Valentine.
Click here to view the course.
You will most likely find different definitions of TAM-SAM-SOM on the web, but the ultimate goal is the same: educate VCs on your market opportunity, and convince them they should spend more time studying it with you.
Most founders don’t spend enough time researching and analysing their market, let alone craft a clear and concise Market page for their pitch decks.
The TAM-SAM-SOM grid is a good way to communicate the market opportunity to VCs, and hopefully get a second meeting to go further.