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Table Table 3 Go-to-market & pricing

Which operational miscalculations undermine market sizing?

MiscalculationRoot causeStrategic failureCorrective protocol
The 1% market share fallacyProjecting revenue by taking an arbitrary sliver of a huge TAMProduces ungrounded forecasts decoupled from sales capacityBuild bottom-up models bounded by sales rep quotas
Conflating TAM with SAMTreating all industry participants as qualified prospectsHires sales reps in regions where the product lacks fitSegment SAM by technical compatibility and geography
Ignoring incumbent switching costsAssuming satisfied prospects will readily abandon incumbentsSeverely overestimates pipeline conversion velocityDiscount SAM by contractual lock-in and replacement friction
Static market sizingTreating TAM as a fixed number rather than an evolving spaceMisses regulatory shifts and technological obsolescenceUpdate market sizing models annually based on win-loss data
Omitting customer willingness to payAssuming all accounts will pay premium enterprise pricesMisprices offerings across low-tier and enterprise segmentsParameterize ACV tiers across discrete account bands

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Reference & Evidence

Source: Table from this essay. Sources and interpretation are given in the article.