Total Addressable Market

I once applied for a job where they asked a time you encountered a promising seed-stage startup. I decided to tell the story I heard about GENIUS.COM and completely misunderstood it's potential. I was young at that time and didn't think the same way I do now. I had a limited number of words to explain the story so I kept it simple. Here's what I wrote:

One of the most promising seed-stage startups I’ve seen was GENIUS.COM. It was the first time I heard about startups. I was only a student lurking poker forums online when I read a post by a pro player who decided to invest money in a friend’s startup that focused on providing analysis of rap lyrics. I thought it was a terrible idea; a small market and unappealing niche. 

I was wrong. It turns out early users were obsessed with the product and the startup eventually pivoted to annotate the whole internet’s creative work.

I learned two things watching the company grow: 1) it’s better to have 10 passionate customers than 1000 who don’t care about you and 2) you need to ask the right questions when estimating a market; rap songs analysis and creative work annotation are two different beasts.

In this case, the company was addressing a far bigger field that I thought. I misjudge their total addressable market. I just used GENIUS.COM to look up facts about Morrissey's Everyday Is Like Sunday. It made me think of that story.