RE:RE:Challenges to Valuing Venzee PotentialMidtown007,
I believe I heard your question to John back then, if not specifically your question I remember John being asked similar question and his replying similarly (market so large hard to say at that point), In one of his investor interviews in past month he also was evasive on talking about what he thought the total market potential is beyond saying he believes it is very large, so from these comments I think John doesn't feel that the TAM metric is particularly useful (just my opinion) as its just to broad.
I have heard that the Venzee investor relations person communicated in the past month or so, as a reply to the question of what they see as their TAM as it currently being 9 Billion US/year growing to 27 Billion by 2028.
1% of current TAM would be 90 Mil in ARR. in 7 years 1% would be 270 Mil.
I feel it just is not a useful metric. it's to broad for mid term planning and market share projections.
In doing a bit of research on putting together SAAS "Go to Market PLans", investor presentations, business plan development I came across the terms SAM (Servicable Addressable Market) and SOM (Servicable Obtainable Market) which seem to be more relevant and are being used more in advanced SAAS planning/forecasting efforts .
Following is a definition/commentary on them that I copied and saved for my reference and I feel is very useful in focusing in on what is the really key area's to think about regarding market size and obtainable near term market share goals:
SAM. Servicable Available Market SOM. Servicable Obtainable Market
"SAM and SOM should be defined as early as possible in your go-to-market as the likelihood of a startup reaching 100% of its TAM is negligible thus SAM and SOM are optimized to get the business to a point where dominance in a vertical or beach-head segment is possible. Serviceable available market focuses on the part of your TAM that is being directly served by your product where your product momentum points towards the highest propensity for product-market fit whereas serviceable obtainable market focuses on what share of your SAM can be captured given your current product suite and trajectory".
This is why in past few posts I have mentioned the idea of thinking more about these metric's. There clearly used within the industry and have the most relevency to assisting us in determining Venzees mid-term future valuation potential (in my opinion).
One has to believe they have a much better idea now then they may have 1 1/2 years ago (John having only been with the company a little over 1 year at that point and having been really at start of the transition to it's current SAAS business model) of what their realistic SAM and especially SOM is relative to the CURRENT services they are offering and the corporate capabilities they reasonably can direct towards that market in the next 3-5 years and what percent of that market they feel they can acquire in that time span.
Hopefully we get some sense of this from them in the near future.
Take Care All.