Entrepreneurship and

Innovation in
Biomedical Engineering
Session 5
Department ofOrganization Engineering, BusinessAdministration andStatistics
1 Year 2022/23
Session 1

▪ Step 4: Calculate the Total Addressable Market (TAM)

Size of the Beachhead Market.
▪ Step 5: Profile the Persona for the Beachhead Market.

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4. Total Addressable Market (TAM)
Step 4

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4. Total Addressable Market (TAM)
Step 4

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4. Total Addressable Market (TAM)
What is TAM

The TAM for your beachhead market is the amount of

annual revenue, expressed in dollars per year, your
business would earn if you achieved 100 percent market
share in that market.

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4. Total Addressable Market (TAM)
Calculate TAM
How many end users exist that fit your End User Profile.
1. Bottom-Up Analysis 2. Top-Down Analysis
Secondary market
Customer lists, trade research, such as market
associations, and other analysis reports, to
sources of customer determine how many end
information. users meet different
characteristics.
We should use both approaches
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4. Total Addressable Market (TAM)
Calculate TAM
How many end users exist that fit your End User Profile.
1. Bottom-Up Analysis 2. Top-Down Analysis
Secondary market
Customer lists, trade research, such as market
associations, and other analysis reports, to
sources of customer determine how many end
information. users meet different
characteristics.
We should use both approaches
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4. Total Addressable Market (TAM)
Calculate TAM
How much are they spending today to accomplish what
your product does? How much have they paid in the past
for other new products?

TAM = Multiply the revenue per end user by

the number of end users (€/year).

Generally, aTAM that is between $20 million per year to $100

million per year is a good target*.

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4. Total Addressable Market (TAM)
TAM SAM SOM

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4. Total Addressable Market (TAM)
TAM SAM SOM

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4. Total Addressable Market (TAM)
TAM SAM SOM

• SAM (Serviceable Addressable Market)

• Whatportionofthemarket(TAM) can weserve withour
currentresourcesand productionmodel?
SAM =Target segmentofTAM x Revenueper enduser(ACV)
• SOM (Serviceable Obtainable Market)
• What percentage of the SAM can we realistically reach?
SOM = Last year’s market share xThis year’s SAM

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4. Total Addressable Market (TAM)
Other considerations

• What is the estimated compound annual growth

(CAGR) of your market?
• How long might it take for you to achieve 20% market
share?
• What would be your market share if you are
reasonably successful?

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5. Persona for the Beachhead Market
Step 5

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5. Persona for the Beachhead Market
What Persona means
▪ The Persona is a person who best represents the
primary customer for the beachhead market.
▪ The process of defining a Persona for your
beachhead market makes your target customer
tangible so that all members of the company
have absolute clarity and focus on the same goal
of making your target.
▪ The Persona should be a real person, not a
composite.
▪ No end user represents 100 percentthe
characteristics of every end user in your End User
Profile.
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5. Persona for the Beachhead Market
How to choose and profile the persona
▪ All key members of the team should be included in the
process.
▪ Answer the question: If we had only one end user to
represent our End User Profile, who would it be?
▪ If you already have sales, analyze the most successful
customers to date.
▪ If you have not sold any product yet, then look at the
primary market research you have already done and analyze
some of the customers who actually wouldpay for your
product (not just those who are “interested”!).
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5. Persona for the Beachhead Market
Fact sheet of the Persona
▪ Prepare a fact sheet of the Persona with the information you
already have about him/her (use a real name or alias!).
▪ Then enroll all the members in interviewing the Persona.
▪ Once finished your fact sheet, summarize the key areas and
post it on the wall so that your team does not forget who they
are in business →Purchasing criteria in prioritized order.
▪ You may need to go back and revise your Persona in an iterative
fashion in later steps.
▪ Two-sided markets companies might need two Personas.

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5. Persona for the Beachhead Market
Fact sheet of the Persona

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Almost done with customers.
We are only missing Step 9

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