For early-stage founders, the concept of Total Addressable Market (TAM) is a persistent concern, as they strive to disrupt and conquer their respective markets. However, Jahanvi Sardana, a partner at Index Ventures, offers a timely reminder: numerous successful startups have originated from markets that were previously nonexistent.

During her presentation at TechCrunch’s 2025 All Stage event in Boston, Sardana posed a thought-provoking question to the audience: “What was the market for search engines before Google? What was the market for operating systems before Microsoft, or the market for cloud computing before Amazon?”

Sardana drew an analogy between TAM and surfing, where founders must ride the waves of emerging trends. The internet, mobile devices, cloud computing, and now artificial intelligence have all been significant waves that founders have had to navigate. “Have you developed a product that is well-suited to ride this wave?” she asked, emphasizing the importance of achieving product-market fit.

Sardana categorizes TAM into three distinct buckets: known markets, emerging markets, and invisible markets.

The first category, known markets, refers to existing markets where a founder seeks to replace an established legacy player. In this scenario, the founder must demonstrate to investors why their startup idea is superior. As Sardana noted, “Everyone brushes their teeth, so you need to explain why you’re creating a better toothbrush.”

The emerging market category refers to a specific sector of the market that is already utilizing a product, with potential for mainstream adoption. Sardana cited the example of non-alcoholic beer, which gained popularity over time.

The invisible market, which Sardana described as “the biggest trap” and “a bit of a dark art,” is a market that does not yet exist. In this scenario, a founder must create a new market and provide investors with evidence of their innovative capabilities. Sardana referenced the example of smartphones in 2006, which revolutionized the world despite initial uncertainty about their demand. “People often don’t know what they’re looking for, and sometimes you need to show them what’s possible,” she said.

The audience, comprising many early-stage founders, engaged Sardana with questions, primarily focusing on what investors expect to see. For instance, do investors want to see a TAM slide in a pitch deck?

Sardana advised that it’s acceptable to create a TAM slide and discuss the underlying math, but warned against over-reliance on industry metrics rather than unique insights. She also cautioned against excessive dependence on industry reports, as this may indicate a lack of deep thinking about the market.

When asked about sizing TAM in large marketplaces, Sardana acknowledged the challenge, referencing Index’s past decision to pass on Airbnb due to concerns about its TAM. However, she noted that Airbnb ultimately created a new inventory, leading to a significant shift in consumer behavior. “You want to focus on what unlocks supply and how behavior will change once that supply is unlocked,” she said.

The audience also inquired about what makes a company stand out to an investor like Sardana. She emphasized that understanding the customer and their willingness to purchase a product is crucial. “We’re in the business of evaluating founders more than markets or products,” she said. “When you discuss your market, it’s really a reflection of your ambition.”