Crossing the Early-Stage Startup TAM Chasm: Having a Crazy Big Vision While Executing a Realistic Short-Term Plan

Many founders find themselves frustrated when pitching their early-stage startup ideas to investors. Two common pitfalls often trip them up:

1. Failing to convince investors that the Total Addressable Market (TAM) is large enough.
2. Failing to present a realistic and viable short-term execution plan.

These challenges stem from a chasm between two seemingly opposing needs: the need for a realistic and actionable plan for the next 12–18 months and the desire for a bold, ambitious vision that excites investors. Founders often lean too far in one direction: focusing on the big future, which can make their idea seem unrealistic, or emphasizing short-term plans, which can make the opportunity feel too small. Bridging the gap between these two is an important part of building and communicating a solid startup strategy.

Bridging the Gap

The method I recommend to most entrepreneurs is called “working backwards” — a technique commonly used at Amazon to outline new products or business lines.

As a founder, begin by asking yourself these questions:

• How would the world be different in five years if your company is wildly successful?
• Which companies will you disrupt?
• What user behaviors will change?
• What great value will you bring to your customers?

At Amazon, the answers to these questions are often formatted as a press release. Here’s an example for an imaginary product, Teleporty:

Today, Teleporty, the Silicon Valley startup famous for shipment teleportation services, is launching its human teleportation service.
In a groundbreaking achievement, customers across the globe can now safely teleport to any location worldwide. Teleportation is instant, safe, and costs a fraction of a flight. Following FAA approval earlier this year, Teleporty promises to revolutionize global transportation. In related news, the Airlines Stock Index has plummeted by 90% on the New York Stock Exchange.

This vision is massive. The TAM is enormous. But today, your technology only allows you to teleport apples a few yards, and half of them arrive as oranges. So, how do you bridge the gap?

Charting the Path

Once you have your vision, outline a realistic roadmap to get there:

• Year 1: Improve the technology to reliably ship apples within a city. Start selling to local shipping companies.
• Year 2: Expand to other goods (e.g., fruits, vegetables, meats, non-perishables) and extend shipping distances nationwide. Partnering with brands like FedEx.
• Year 3: Develop and test teleportation for livestock and pets. Seek FAA approvals and raise significant funding.
• Year 4: Begin piloting human teleportation. Work closely with regulators to ensure safety and compliance.
• Year 5: Achieve the vision: safe, instant, global human teleportation.

By connecting the dots from where you are to where you want to be, you can craft a compelling narrative. This makes it easier to cross the TAM chasm.

Presenting Your Story

Here’s how to pitch this roadmap:

“We aim to become the largest transportation company in the world, disrupting the $11 trillion shipment and travel industries. We are starting with non-human transportation and already have a working pilot for shipping apples. We’ve secured a letter of intent from a local shipping company to purchase our services. Next year, we’ll expand to [specific goals], and in the following years, we’ll [more milestones].”

This approach clearly demonstrates:

1. A huge TAM.
2. An inspiring vision.
3. A viable short-term plan.

At this point, the only question the investor needs to answer is whether they agree with your plan. This often leads to tactical conversations — e.g., “Why not start with books instead of apples?” — rather than questioning your entire strategy.

Real-Life Example: Slack Developer Platform
I joined Slack two weeks before the initial launch of the Slack Developer Platform. At the time, we had very limited capabilities, a modest team, and a short-term roadmap. However, we also had a big vision:

Connect Slack to all the tools and services at work, turning Slack into the interface for everything you do on the job. Making your work life simpler, more pleasant, and more productive.

Within a few years, we realized this vision, evolving our product from a handful of fun APIs to a fully functional developer platform.

Beyond Investors

Working backwards from a big vision isn’t just valuable for attracting investors — it’s equally important for building a great company. A bold and compelling vision helps you attract top talent who are inspired by ambitious missions, convinces partners that you’re aiming for greatness and worth aligning with, and resonates with customers by clearly communicating your value proposition. Every successful company started small, but they all had a powerful vision that drove their growth and inspired their teams. By combining vision with execution, you can do the same.