Go-To-Market StrategyvsTotal Addressable Market (TAM)

A Go-To-Market (GTM) strategy is the plan for how you'll reach, acquire, and serve customers profitably. It answers three questions: WHO is your ideal customer? HOW will you reach them? WHY will they choose you over alternatives? There are three dominant GTM motions: Sales-Led (Salesforce, $80K+ ACV), Product-Led (Slack, Figma, <$1K ACV self-serve), and Channel-Led (Microsoft through resellers). Choosing the wrong motion for your price point and buyer is the #1 reason startups stall at $1-5M ARR.

Total Addressable Market is the total revenue opportunity for your product if you achieved 100% market share. It's broken into three layers: TAM (total market), SAM (Serviceable Addressable Market — the segment you can reach), and SOM (Serviceable Obtainable Market — what you can realistically capture). Investors use TAM to assess if a market is worth entering. VCs typically want a $1B+ TAM to justify their fund economics.

The fatal trap is running a Sales-Led GTM with a Product-Led price point (or vice versa). If your product costs $29/month, you cannot afford a $15K CAC from a sales team — the math doesn't work. Conversely, if you're selling a $200K enterprise contract, a 'sign up free' button won't close deals because enterprise buyers need RFPs, security reviews, and executive alignment. Dropbox tried to go upmarket with sales reps for a $150/user product and burned $100M before pivoting back to PLG.

The most common TAM mistake is 'top-down' sizing that inflates the number. Saying 'the global CRM market is $80B, so our TAM is $80B' is nonsensical if you only sell to 500-person tech companies in North America. This 'TAM fantasy' is the #1 reason investor pitches fail — it signals the founder doesn't understand their actual market.

Map your GTM motion to your ACV: Under $1K ACV → Product-Led Growth (self-serve, free trial, community). $1K-$15K ACV → Inside Sales (demo-led, 2-4 week sales cycle). $15K-$100K+ ACV → Field Sales (relationship-led, 3-6 month cycle). Calculate: GTM Efficiency = Net New ARR ÷ Sales & Marketing Spend. Target: >1.0 for healthy, >1.5 for efficient. Below 0.5 means your GTM motion is wrong for your market.

Use bottom-up TAM calculation: count the number of potential customers you could serve × what they'd pay annually. Start with SOM (what you can realistically get in 3 years), then SAM, then TAM. Be specific: '12,000 mid-market SaaS companies × $30K/year ACV = $360M SAM.' VCs respect founders who demonstrate precise market understanding over inflated claims.