Index Ventures, one of the leading venture capital firms in the world, has been at the forefront of investing in successful startups for over two decades. Their portfolio includes companies like Dropbox, Deliveroo, and Revolut, which have become household names in the tech industry. Recently, one of their partners, Jahanvi Sardana, shared a valuable reminder for all the founders who are worried about finding their target market for their product or service. She believes that many successful startups have emerged from markets that were essentially non-existent at the time.
In today’s competitive business landscape, one of the biggest concerns for entrepreneurs is finding their Total Addressable Market (TAM). It refers to the total number of potential customers for a particular product or service. Many startups struggle to identify their TAM and often get discouraged, thinking that their idea may not have enough demand in the market. However, Jahanvi Sardana, with her years of experience in the venture capital industry, has a different perspective on this matter.
She believes that instead of focusing on finding a pre-existing TAM, founders should focus on creating a market for their product or service. The key to success lies in identifying a gap in the market and creating a demand for your offering. Many of the successful startups that Index Ventures has invested in, have done just that. They have identified a problem or a need that was not being addressed by any existing product or service, and they have created a market for themselves.
Take the example of Dropbox, a cloud-based file storage and sharing service. When it was founded in 2007, the concept of cloud storage was relatively new, and there were not many players in the market. However, the founders of Dropbox saw the potential of this technology and created a market for it. Today, Dropbox has over 600 million users worldwide and is valued at over $8 billion. Similarly, Deliveroo, a food delivery service, identified a gap in the market for high-quality food delivery and created a demand for it. It is now present in over 200 cities and has a valuation of over $2 billion.
Jahanvi Sardana also points out that many startups have emerged from markets that were essentially non-existent at the time. For example, Airbnb, the world’s largest accommodation-sharing platform, created a market for itself by offering a unique and convenient alternative to traditional hotels. Today, it has over 7 million listings worldwide and is valued at over $100 billion. Similarly, Uber, the ride-hailing giant, disrupted the traditional taxi industry and created a market for on-demand transportation services.
The key takeaway from these success stories is that instead of worrying about finding a pre-existing TAM, founders should focus on creating a market for their product or service. This requires a deep understanding of the problem or need that your offering solves and a clear vision of how it can benefit your potential customers. It also requires a lot of creativity and innovation to differentiate your product or service from existing solutions in the market.
Jahanvi Sardana also emphasizes the importance of having a long-term vision for your startup. She believes that many markets are constantly evolving, and what may seem non-existent today may become a thriving market in the future. The key is to have a strong product or service that can adapt and evolve with the changing market dynamics. This is evident in the success of companies like Airbnb and Uber, who have continuously evolved and expanded their offerings to cater to changing customer needs.
In conclusion, Jahanvi Sardana’s reminder is a valuable lesson for all the founders out there who are worried about finding their TAM. Instead of focusing on a pre-existing market, focus on creating a market for your product or service. Be innovative, have a long-term vision, and most importantly, believe in your idea. As Jahanvi Sardana rightly says, “Many startups have emerged from markets that, at the time, were essentially non-existent.” So, take the leap of faith, and who knows, your startup may be the next big success story.