When you start a startup, you constantly hear the question: "How big is your market?" For early-stage founders, it can feel overwhelming when there's no hard data to back up your answer.
I attended a startup training program that covered everything from TAM/SAM/SOM estimation to writing business plans and fundraising strategies. Here are the key takeaways.
How to Logically Estimate TAM, SAM, and SOM#
Early-stage startups rarely have solid market data. That's exactly why the logical reasoning process itself matters more than the numbers.
A ride-hailing service is a great example. Assume you can charge around $2.50 per ride for solving safety concerns and ride refusal issues. Multiply that by the number of transactions, and you get your SOM. From there, you can scale up to TAM.
There are common mistakes when estimating market size.
- If you're building a product marketplace, don't use total retail sales as your TAM. Use the global market for your specific product category instead.
- For an ad platform, you need a clear differentiator over existing platforms — better targeting, higher efficiency, or lower cost. Even excelling with a specific customer segment counts.
- For a matching service, you need concrete calculations like "10,000 matches per day" to make revenue projections credible.
Rather than just listing statistics for TAM/SAM/SOM, saying "based on our target customers and subscription model, we calculated..." is far more convincing.
Tips for Market Research#
Check public financial filings (like DART in Korea or SEC filings in the US) for companies with similar services. You can benchmark their revenue structure and business model. Research firms like Nielsen, Gallup, and survey platforms are also valuable data sources.
And make sure to show that the market is growing. Investors put money into growing markets.
How Evaluators Actually Read Business Plans#
Evaluators review around 40 applications per day. With competition ratios of 20:1 (400 teams in Seoul alone), a business plan that's easy to scan has a clear advantage.
A business plan that summarizes each section in one crisp line is much easier for evaluators. Here's how to structure the key messages.
1. Problem Awareness — Why Your Product Needs to Exist#
The key message: "There's a massive inefficiency in our target market, and it's causing real pain."
- Scale of the problem x willingness to pay for a solution = market size
- Identify all stakeholders affected by the problem and map their interests
- Compare costs vs. benefits from the perspective of the entire transaction
2. Feasibility — Your Development Plan#
The key message: "Our product will solve this market problem."
- If your customer wants to kill time, they have plenty of alternatives — movies, YouTube, games. You need to explain why your service delivers more value.
- Build a competitor analysis table with service names, launch dates, revenue, and your competitive advantages
- The moment an evaluator thinks "the competitor would probably do this better" — you're out
3. Growth Strategy — Go-to-Market#
The key message: "Our product can win customers and generate revenue."
- You need a concrete roadmap for how you'll reach significant revenue milestones
- Show expansion potential beyond subscriptions and ads — think B2B and B2G
- Clarify who's paying you and whether your targets are achievable within the market
4. Team Composition#
The key message: "We have the capabilities to make this happen."
A business plan that shows you've talked to many customers in a short time and extracted real insights makes a strong impact. Having access to a large pool of target customers is also a clear strength.
Practical Advice on Fundraising#
Don't think of fundraising as mandatory. There are companies that grew purely on revenue and profit without multiple rounds of external investment.
That said, here's the typical path for scaling up.
- Seed — Initial investment through accelerators
- Follow-on — Grants or investment from foundations and institutions
- Pre-A, Series A, B, C — Full-scale VC investment
- IPO — Going public (the exit market)
A few practical tips.
- PMF (Product-Market Fit): For early-stage companies, at least 80% of users should show engagement before you can claim PMF
- B2B vs B2C: B2B has lower costs but requires constant sales effort; B2C has higher costs
- IR deck: Focus on one big market. If you have multiple, you're at the level of spinning off subsidiaries
- Investment committee reports: Prepare them as docs or PDFs. Include market overview, growth rates, global competitor activity, and revenue trends
What a CEO Should Actually Do#
A CEO's job isn't administrative busywork. The core responsibilities are securing funding, recruiting talent, setting strategy, and building competitive advantages. Growing a strong second-in-command early on is equally important.
If you're spending too much time on admin tasks and expense reports, growth will stall. The prediction that business developers (BDs) will become increasingly valuable was one of the most striking takeaways.
Ultimately, startups operate in a winner-take-all world. With high sunk costs at stake, being obsessed with your market and customers is the most important mindset you can have.
The best way to predict the future is to create it.
— Peter Drucker
