Is identifying your TAM a one-time effort?

Answered by: Phil Fernandez, Co-Founder, Marketo

Category: Marketing and Sales

Always be seeking more TAM (Total Addressable Market) It sounds obvious but, sometimes your success will depend on it. At Marketo, we sold a product to B2B, SMBs (small and mid size businesses) and the ecosystem. It was a beautiful thing. It was a big TAM. We made a bet on it in the early days. Salesforce just kept growing like a weed and the market was just getting bigger and bigger as we grew.

The danger was that it produced complacency. Later on, we introduced Microsoft Dynamics which was a second CRM to go after. I didn't see the need for business development - for people to open verticals, for people to challenge us about selling different ways, through different segments. We were doing incredible and by the time, all of a sudden, it was time to grow from 200 million to 300 million, the fact that we had not planted enough seeds to have enough TAM really came home to roost.

No matter how good your initial TAM is, no matter how good it feels, no matter how amazing you see a company ,as a CEO, as a leader, have a plan B. Know what's next, know where you're going next, make sure you're always talking about it. Even when it seems like the last thing you want to talk about in a strategic planning meeting end with what's our next thing?  Be absolutely zealous about ensuring that you know what the next piece of TAM you're going to go after is.

Think about what's going to happen if you have more money, what you would do next. Give yourself that opportunity to dream but make it real. Know what's going to be defensible if somebody makes a move where you've got to pivot because some TAM gets caught up somewhere. Where are you going to go next? What's the defensive move?

One of the best things you can have as a CEO is somebody who's going to make you uncomfortable challenging you about some cockamamie thing that doesn't make any sense, that might be the next place to expand the business. You’ve got to keep investing in more TAM, and have those ideas, because the day is going to come on the path from zero to 100 where you need to pull that trigger.