How big is the problem?

In any pitch, the star of the show should be the problem you are solving. That’s your reason for being. That’s your “why” (per Simon Sinek), and you should, if at all possible, weave a story about how you came to know about, experience, and come to a solution to this problem. But you should also work to demonstrate the relative size of the problem. That’s what’s known as the “Total Addressable Market” or “TAM”, for short.

In other words, how big a problem is this thing you’re tackling?

That’s a tough piece of information to know, and even tougher to slip into an elevator pitch. But it needs to be done. First, you need to know the size of your market before you set out to build a business around it. Is it even big enough to support a lifestyle business or a growth startup? How do you know? That’s the type of information that comes naturally from having lived, or experienced, the problem first hand.

Second, you need to figure out a way to put that number or set of numbers into your pitch. Here are some examples from pitches we’ve heard at Pitch Practice.

• “Every 30 seconds a bike is stolen in the U.S., and the average cost of a bike is $400.”
• “66% of millennials have student loan debt, and the average debt is $35,000.”
• “60% of millennials are leaving their jobs because they are not getting the leadership development that they want.”

Each of these — in one sentence or maybe 3 seconds — gives a solid look at the size of the market. Now, if you’re talking to an investor, that market may or may not have an interest in that market, but you’ll get to that point much quicker when you demonstrate that you know the problem and the size of the market. One of the worst things you can do is deliver a compelling pitch, and then not be able to back it up with real-world data.

The total addressable market (TAM) belongs in every pitch. If possible, use actual numbers that you’ve discovered in your research, rather than “I firmly believe” or “I feel that”, because those phrases don’t mean anything. If you don’t know the size of your addressable market, learn it first, before you pitch.

Originally published at kevinsandlin.com on June 14, 2016.