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Welcome back

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In this sub-session,
we're going to talk about target marketing

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Understanding target market is also 
very important for the entrepreneurs

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So without understanding target market,
we cannot simply do the businesses

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Target market

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I want to give you some of
the interesting examples about the target market

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Do you know the Zappos.com?

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Zappos.com is a specialized e-commerce website for shoes

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And Zappos.com was created by one of the entrepreneurs

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His name was Nick Swimmer

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He had an idea to sell the shoes online

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Then he created just a simple website

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and take a picture around the shoes store nearby his house

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Then just he uploaded this picture on website

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And then just wait for the consumers

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And surprisingly, so many consumers

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place the order from the online

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Once he received the consumer order,

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then he visited the real shoes store

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and just purchased the shoes from the real shoe store

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And deliver these shoes to the consumers

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who place the order through the online

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This is a very, very small and  experimental website

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But later, the consumer base grows

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and he needs some  money

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to make his business standardized and structured

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We need some  system, something like that

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So he tried to generate investment

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He tried to attract investors

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So he met the investors finally

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Then he said that,

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well, our company sells shoes online and please invest us

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This is his suggestion

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Then the investors at that time, his name was Tony Hsieh

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Then later he became the CEO of Zappos.com many years ago

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But he passed away through the tragedy accident

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So Tony Hsieh at the time, he was an investor

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He responded to the suggestion of the next woman

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Tony Hsieh said that, who would purchase shoes online?

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Okay, to purchase shoes and we should try on it

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But if we purchase shoes, how can they try on the shoes?

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So my idea is nobody can purchase the shoes

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Okay, it's a  a natural reaction, right?

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A natural reaction

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Then the next woman responded to
the criticism of Tony Hsieh like this

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Well, in 1998, the US shoe market was worth $40 billion

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and 50 of them were being sold through the mail-order catalog

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Okay, catalog means 5% of them,

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5% of the entire consumers

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purchased the shoes anyway without trying on it

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So even before the internet exists,

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1 out of 20 pairs of the shoes
was already being sold by mail-order

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Then right now, we provide some alternative marketplaces,

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which is online, e-commerce

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So it's about just selling through the internet

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what was being sold already through the mail-order catalog

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So right now we have 5% of the entire shoe market

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What do you think?

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What an impressive, what an impressive, right?

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So Tony Hsieh immediately understood the market side,

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immediately understood the business

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So Tony Hsieh said that, yes, what about $500,000?

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Was $500,000 enough?

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So he invested $500,000 right now

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This is a  very important, very interesting story

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about understanding target market

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So the next woman totally understood the market side

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And then he has the ability

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to persuade other people to understand the market side, right?

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Let's move on to another interesting story

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This is the Chinese glove problem

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Okay, what it is?

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Please support you guys as glove makers

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so you are making gloves

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And then your goal is to go to China

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and sell your gloves to the Chinese people

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it's a great market

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because there are about how many people live in China?

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There are about 1.4 billion

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Yes, 1.4 billion people live in China

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Huge population, huge

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so your approach is good, right?

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Then my question is, how much is your real market side?

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how much is your target market?

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Just think about a little bit, think about it

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how much is it?

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I want to go to China where 1.4 billion people live there

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Then how much is my target market?

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I'm the glove maker

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Yeah, what about 1%?

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let's say just simply 1% of the total market

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we have 1.4 billion people

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1% means 14 million

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14 million people, right?

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So, you target to 14 million

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it's about 25% of the entire Korean population

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Wow, it's still huge, huge scale, right?

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So, you are going to just make a simple glove

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and do the business with 14 million people, right?

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So, is it done?

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What do you think?

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So, you're done, right?

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And the 14 million is your target market?

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What do you think?

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Well, actually, there is a problem

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What kind of problems?

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We don't know what types of the glove you are making

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We don't know it, right?

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So, your glove can be, you know, wintertime's glove

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winter glove

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Ski glove

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But think, not everyone in China needs those types of gloves

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because, many Chinese people live in  tropical area

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which is very warm and very hot

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They don't need the glove, okay?

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They never use the glove

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And then so many Chinese people don't know how to play ski

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because they live in very hot area, right?

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What do you think?

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So, we get rid of those types of consumers

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So, you are not targeting 1.4 billion, as an entire market, right?

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And also, think about it

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You know, if your glove is examination glove for the hospital,

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then your consumers are  hospitals, okay?

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It's not university

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It's not just workplaces

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Just normal workplaces don't need your types of your gloves

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Only just the hospital need your glove

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So, based on their usage, based on the consumers' preference,

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your target market can be different

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And what about income level
and buying habit and cultural differences?

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based on these, unknown factors,

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based on these unknown factors,
your target market can be different

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So, this Chinese glove problem teaches a very critical lesson

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What it is?

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Large population, does not automatically mean the large market

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As an entrepreneur, we must avoid these types of traps

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These types of traps of
total population equal your consumers

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Instead, we need to define  a realistic and reachable

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and possible segment based on your product

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and based on your consumers' preference

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and consumers' usage, consumers' need

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We say it is a target market, okay?

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It's a target market

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that means we need to identify

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who actually needs your product

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Before then, you identify what is your product

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and who actually needs your product or service

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and who is willing and able to pay for your product

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And where they are living

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And how can you reach them

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How can you reach them

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So, this is all about the target market

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now we understand what it is, right?

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As we discussed before, the market is a set of buyers

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But more important thing is

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the buyers have several groups,

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several different groups of buyers exist

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So, for example,

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there are total theoretical market, entire market

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like the China, in China, 1.4 billion people

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These are entire theoretical market

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And among the theoretical market, there are sub-market

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and among the sub-market, there are addressable market

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And among the addressable market,

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we can target a certain  market

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So, the target market consists of several different layers

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We say it is a target market funnel

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Again, target market funnel consists of four different layers

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from the total theoretical market,

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sub-market, addressable market, and target market

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What is the total theoretical market?

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It is the entire, all potential consumers

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Sub-market, among all potential consumers,

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sub-market refers to the set of the buyer
with the interest in your product

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Only the people,

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only the consumers who has an interest in your product

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And among this sub-market,

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addressable market refers to the set of the buyer

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who have interest and access to your product

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Again, they have interest in your product
and also they can access your product

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For example, if your product is a mobile application

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then addressable market

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should have some  interest in your mobile application

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as well as they can access your product

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it means they should have smartphone,
they should have cell phone

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Without cell phone, they cannot access your product,

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although they have an interest in your service or product

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Do you understand that?

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this is a  addressable market meaning

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And among the addressable market, you just put

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a very critical or very specific criteria, one or two criteria

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to identify your target market

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This is a  a target market that you decided to capture

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from the addressable market

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So, now you understand what is the target market funnel

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so now, we are going to apply the target market funnel

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into the real world startup

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Let's look at it

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This is a target market funnel again

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And I'm going to apply this concept to the LinkedIn businesses

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You know the LinkedIn, right?

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LinkedIn is  a specialized social website, social network

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Specialized social network company for  a job

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So you can find out great job opening from the LinkedIn

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And also, you can upload your profile so that

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the companies can recruit the jobs the job candidate

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So, this is  a LinkedIn

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So, when the LinkedIn started the businesses,

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they probably conducted the market, the target market

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Conducted the research about target market

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And then they started in America

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At that time, how many people live in America?

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Because the total population in America would be

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the total theoretical market

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So, how many people live in America?

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Yes, at that time, just 320 million people live in America

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This is a  total theoretical market

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of the LinkedIn at that time

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right now, the population increased a little bit

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But, when the LinkedIn started in America,

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there are 320 million people live there

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And what is the soft market?

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Among the theoretical market, we need to identify the soft market

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the soft market means

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any set of the buyers who are interested in your product

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so who will be interested in the LinkedIn types of the social media?

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social network, I'm sorry, social network website

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about job seekers, of course

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Because LinkedIn is a special type of

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social network website for the job seekers

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how many of them?

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So, we can figure out how many of them

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So, roughly maybe 70%

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71% of the entire population would be job seekers

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And they are interested in job

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although they have a job, they can seek for the new job

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So, 71% of them, 71% of them are job seekers

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How many? 226 million people

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then later on, we need to figure out addressable market

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Addressable market means any set of the buyers

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who has an interest and also can access to your product or services

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What is your product LinkedIn?

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Hey, LinkedIn product is social network service

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Social network service means, so how to reach your service?

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in order to reach your services,

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they should use social network services

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They should have an account of the social network services

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And they should be familiar with the social network service

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So in this case, we'd better identify

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how many people use the social network service

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it is called as social network services, penetration

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this is a social media, social network penetration was around 60%

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So, how much of them?

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60% out of the served market, right?

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60% out of served market

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can use the social media or social network

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How many of them? 126 million people

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Among the 100 million people,

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we finally identified our target market

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so we started, we started to serve the market

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How many? 126 million people

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among them, who would be our real and ideal target market?

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because we are targeting some  qualified job seekers

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In order to meet our consumer need

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we target to the educated people

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00:17:15.200 --> 00:17:18.200
Educated, at least, high school graduate

268
00:17:18.700 --> 00:17:19.950
Okay, wow, great

269
00:17:20.200 --> 00:17:21.150
So, how many of them?

270
00:17:21.271 --> 00:17:22.300
How many of them?

271
00:17:22.600 --> 00:17:26.900
amongst the rest of the market, 87% of them

272
00:17:27.250 --> 00:17:31.300
87% of American people graduate high school, at least

273
00:17:31.850 --> 00:17:36.750
So, then we can apply 87%, to the addressable market

274
00:17:36.950 --> 00:17:40.100
Then we got 110 million people as our target market

275
00:17:40.800 --> 00:17:44.900
so based on this target market, LinkedIn started their businesses

276
00:17:44.991 --> 00:17:46.600
And then they achieved the actual demand

277
00:17:46.800 --> 00:17:47.650
How much?

278
00:17:47.750 --> 00:17:50.650
Actual demand was 111 million

279
00:17:50.950 --> 00:17:54.750
So, their target market was very close to their actual demand

280
00:17:55.500 --> 00:17:57.900
this is a target market funnel

281
00:17:58.150 --> 00:18:00.900
And now you understand how to calculate your target market

282
00:18:01.700 --> 00:18:06.300
Again, your target market started from theoretical,
total theoretical market

283
00:18:06.550 --> 00:18:10.600
Then you identify your, served market first

284
00:18:10.900 --> 00:18:14.900
Then identify addressable market from the sold market

285
00:18:15.150 --> 00:18:19.100
Then later you put your criteria one or two, critical criteria

286
00:18:19.550 --> 00:18:23.650
Then you figure out your target market
out of your addressable market

287
00:18:23.900 --> 00:18:25.200
Like LinkedIn, right?

288
00:18:26.850 --> 00:18:32.500
but these days, in the real field of the startup

289
00:18:33.100 --> 00:18:38.600
the startup companies use the
simplified version of the target market

290
00:18:39.200 --> 00:18:45.600
the concept of the target market funnel was great,

291
00:18:45.750 --> 00:18:47.300
but a little bit complicated

292
00:18:47.750 --> 00:18:51.950
so that's why these days, so many startups have simplified this

293
00:18:52.300 --> 00:18:57.150
traditional target market funnel into the TAM-SAM-SOM

294
00:18:57.321 --> 00:18:59.350
Okay, have you heard about TAM-SAM-SOM?

295
00:19:00.500 --> 00:19:02.850
In the previous traditional,

296
00:19:02.850 --> 00:19:07.200
the target market funnel has four different layers

297
00:19:07.250 --> 00:19:11.200
from the total theoretical market,

298
00:19:11.200 --> 00:19:14.100
served market, addressable market, and target market

299
00:19:14.550 --> 00:19:17.500
But the TAM-SAM-SOM has just only three layers

300
00:19:18.400 --> 00:19:20.600
So,TAM-SAM-SOM

301
00:19:20.900 --> 00:19:23.400
let's look at the meaning of the TAM-SAM-SOM

302
00:19:23.750 --> 00:19:25.850
TAM is the total addressable market

303
00:19:26.150 --> 00:19:28.800
Total addressable market means total market demand

304
00:19:29.200 --> 00:19:30.400
total market demand

305
00:19:30.600 --> 00:19:35.650
It can be entire population or it can be similar to the served market

306
00:19:36.050 --> 00:19:39.550
in the previous traditional, target market funnel

307
00:19:39.800 --> 00:19:45.450
So, the TAM in this case, TAM can be located

308
00:19:45.700 --> 00:19:49.800
somewhere in between total theoretical market

309
00:19:50.150 --> 00:19:52.150
and served market

310
00:19:52.400 --> 00:19:56.000
In a traditional target market funnel

311
00:19:56.500 --> 00:19:57.700
What about SAM?

312
00:19:58.000 --> 00:20:00.800
SAM is serviceable addressable market

313
00:20:01.091 --> 00:20:02.650
Serviceable addressable market

314
00:20:03.100 --> 00:20:06.000
serviceable addressable market means the market you can sell

315
00:20:06.700 --> 00:20:09.400
Compared to the traditional target market funnel,

316
00:20:09.750 --> 00:20:15.150
SAM can be located somewhere between

317
00:20:15.550 --> 00:20:17.450
served market and addressable market

318
00:20:18.000 --> 00:20:20.000
In a traditional target market funnel

319
00:20:20.371 --> 00:20:21.450
And what about SOM?

320
00:20:21.600 --> 00:20:25.250
Some is serviceable obtainable market

321
00:20:25.650 --> 00:20:30.950
this market is about the market you can realistically capture

322
00:20:31.300 --> 00:20:32.250
realistically

323
00:20:32.750 --> 00:20:34.150
It can be short-term goal

324
00:20:34.650 --> 00:20:40.000
This is  very similar, somewhere between,

325
00:20:40.750 --> 00:20:44.300
addressable market and target market

326
00:20:44.550 --> 00:20:47.150
in a traditional, target market funnel

327
00:20:47.500 --> 00:20:54.000
Anyway, you should, you'd better get used to this type of concept

328
00:20:54.000 --> 00:20:56.900
because these days so many people use the TAM-SAM-sum

329
00:20:56.900 --> 00:20:59.400
instead of a traditional target market funnel

330
00:21:00.200 --> 00:21:04.500
let's take an example from, previous Japose.com case

331
00:21:05.200 --> 00:21:07.550
So, Nick Swimmer said that

332
00:21:07.550 --> 00:21:12.050
total market, total market term, total market was how much?

333
00:21:12.350 --> 00:21:12.981
Do you remember that?

334
00:21:13.031 --> 00:21:14.750
It's a $40 billion market

335
00:21:15.000 --> 00:21:17.000
$40 billion in 1998

336
00:21:17.750 --> 00:21:21.000
U.S. shoes market worth $40 billion

337
00:21:21.281 --> 00:21:22.211
Do you remember that?

338
00:21:22.500 --> 00:21:25.000
so among the $40 billion, among the $40 billion,

339
00:21:25.400 --> 00:21:30.400
just five of them, five of them are  mail-order, mail-order purchase

340
00:21:30.600 --> 00:21:32.000
five of them

341
00:21:32.000 --> 00:21:35.950
5% of them, 5% of them are mail-order purchase

342
00:21:36.550 --> 00:21:43.450
So, we can calculate, we can simply calculate 5% out of total market

343
00:21:43.750 --> 00:21:44.500
How much is it?

344
00:21:44.600 --> 00:21:45.350
$2 billion

345
00:21:45.500 --> 00:21:47.000
So, the SAM was $2 billion

346
00:21:47.450 --> 00:21:48.100
SAM was $2 billion

347
00:21:48.600 --> 00:21:50.500
And what about SOM?

348
00:21:50.500 --> 00:21:51.000
What about SOM?

349
00:21:51.500 --> 00:21:55.150
So among the 5%, among this $2 billion,

350
00:21:55.150 --> 00:21:57.100
mail-order catalog purchase,

351
00:21:57.800 --> 00:22:02.100
we just target to realistically, realistically,

352
00:22:03.000 --> 00:22:11.000
we can capture just at least 1% of $2 billion market

353
00:22:11.000 --> 00:22:12.000
So, how much is it?

354
00:22:12.000 --> 00:22:13.350
Just $20 million

355
00:22:14.050 --> 00:22:17.050
So, our SOM would be $20 million

356
00:22:18.050 --> 00:22:22.000
it was based on our assumption of just 1% out of SAM

357
00:22:22.250 --> 00:22:23.000
Wow, what do you think?

358
00:22:23.200 --> 00:22:24.300
It's much simpler, right?

359
00:22:24.600 --> 00:22:28.400
It's much simpler than the traditional target market funnel

360
00:22:28.850 --> 00:22:33.550
let's take another example, which is Airbnb

361
00:22:34.000 --> 00:22:35.650
Do you remember the Airbnb?

362
00:22:36.000 --> 00:22:40.650
So, the Airbnb's TAM is a little bit different from

363
00:22:40.650 --> 00:22:43.250
the japost.com's TAM

364
00:22:43.500 --> 00:22:48.450
japost.com calculated this entire total market as dollars

365
00:22:48.950 --> 00:22:52.500
as money, money that consumers spend

366
00:22:53.000 --> 00:22:55.950
But Airbnb calculated

367
00:22:55.950 --> 00:22:59.800
total market based on the numbers of the trips

368
00:23:00.450 --> 00:23:04.450
they calculated how many trips take place a year in America

369
00:23:04.900 --> 00:23:08.250
So, 1.9 billion trips occurs in America

370
00:23:08.650 --> 00:23:12.000
they calculated 1.9 billion trips occurs in America

371
00:23:12.450 --> 00:23:14.000
this is a total market

372
00:23:14.450 --> 00:23:18.000
Among this total market, they calculated SAM

373
00:23:19.150 --> 00:23:23.750
Among the total market, just budget travelers,

374
00:23:25.000 --> 00:23:29.250
or the travelers who care for the efficiency

375
00:23:30.050 --> 00:23:31.850
no luxurious travelers

376
00:23:32.400 --> 00:23:33.800
no hotel users

377
00:23:34.350 --> 00:23:36.150
just budget travelers

378
00:23:36.150 --> 00:23:41.150
who can use the bed and breakfast, who can use a motel

379
00:23:41.350 --> 00:23:42.250
something like that

380
00:23:42.500 --> 00:23:46.400
So, how many of them, and those types,

381
00:23:46.900 --> 00:23:52.000
they calculate those types of trips as 532 million trips

382
00:23:52.250 --> 00:23:56.250
532 million trips are  a budget traveling

383
00:23:56.600 --> 00:23:58.000
Okay, which is great, right?

384
00:23:58.600 --> 00:24:04.400
And the SOM, he 532 million trips,

385
00:24:05.900 --> 00:24:12.000
we can just realistically capture, what about 2% of them?

386
00:24:12.100 --> 00:24:13.100
2%

387
00:24:13.900 --> 00:24:17.400
In this case, we easily calculated 2% of the SAM,

388
00:24:17.400 --> 00:24:18.950
then we can get the SOM

389
00:24:19.250 --> 00:24:20.500
How much?

390
00:24:21.000 --> 00:24:23.000
10.6 million trips

391
00:24:23.700 --> 00:24:27.700
so we target to the 10 million, basically 10 million trips

392
00:24:28.350 --> 00:24:32.500
then we can get some small commission from the 10 million trips

393
00:24:32.700 --> 00:24:35.650
Then we easily get our revenues

394
00:24:36.000 --> 00:24:37.100
expected revenue

395
00:24:37.600 --> 00:24:40.600
This is a very simple version of the target marketing,

396
00:24:40.600 --> 00:24:41.800
TAM SAM SOM

397
00:24:42.300 --> 00:24:44.000
Let's move on to another example

398
00:24:44.750 --> 00:24:46.200
What about the Grab?

399
00:24:46.400 --> 00:24:47.550
Okay, you know the Grab

400
00:24:47.800 --> 00:24:51.050
If you are in Malaysia or Indonesia or Singapore

401
00:24:51.400 --> 00:24:53.750
probably you are very familiar with the Grab

402
00:24:54.200 --> 00:24:59.400
Grab is like the Uber, like very similar to the Uber,
the specialized Uber in this

403
00:25:00.250 --> 00:25:04.000
Southeast Asian countries such as Malaysia, Indonesia, etc

404
00:25:04.700 --> 00:25:08.650
So, how many of the entire markets

405
00:25:09.350 --> 00:25:13.850
Then, in this case, the Grab calculates the total market

406
00:25:13.850 --> 00:25:16.800
based on the money, money that people spend

407
00:25:17.200 --> 00:25:19.400
So, they calculate the TAM

408
00:25:19.400 --> 00:25:23.721
as the money that people spend for the taxi service

409
00:25:23.921 --> 00:25:25.250
How much is it?

410
00:25:25.450 --> 00:25:28.200
Entire, Southeast Asia,

411
00:25:28.200 --> 00:25:31.900
entire market was maximum $20 billion market

412
00:25:32.250 --> 00:25:33.450
this is a taxi market

413
00:25:33.750 --> 00:25:36.450
Taxi market was $20 billion market

414
00:25:37.250 --> 00:25:38.550
When they started businesses

415
00:25:39.200 --> 00:25:40.350
what about SAM?

416
00:25:40.500 --> 00:25:45.050
out of total market, total market TAM,

417
00:25:45.550 --> 00:25:51.750
and then they focused on serviceable market

418
00:25:52.000 --> 00:25:56.000
They focused on serviceable market as Malaysia only

419
00:25:56.350 --> 00:25:59.150
So, we focused on Malaysia only,

420
00:25:59.150 --> 00:26:02.650
which is urban area, urban taxi users in Malaysia

421
00:26:03.300 --> 00:26:06.750
So, then they quickly calculate the money that

422
00:26:07.050 --> 00:26:10.700
urban taxi users in Malaysia spend for the taxi service

423
00:26:11.100 --> 00:26:12.900
So, it was just $1 billion

424
00:26:13.564 --> 00:26:18.144
it was maximum 1 billion then among this is some SAM,

425
00:26:19.204 --> 00:26:22.804
the great founders, realistically

426
00:26:23.664 --> 00:26:27.854
The capture just 2% or 1 or 2% of the SAM

427
00:26:28.244 --> 00:26:32.994
then they easily calculated 5 million to 10 million dollars as a SOM

428
00:26:32.994 --> 00:26:34.704
because we are able to

429
00:26:35.344 --> 00:26:40.544
realistically capture the 1 or 2 percent from the SAM

430
00:26:41.594 --> 00:26:44.504
So our SOM would be 5 million or 10 million

431
00:26:45.204 --> 00:26:48.513
What do you think it can be very easy, right easy follow

432
00:26:48.913 --> 00:26:51.604
You can follow the TAM SAM SOM very easy

433
00:26:51.764 --> 00:26:55.663
Then you can apply this concept in your startup

434
00:26:56.213 --> 00:26:59.063
So I suggest you guys to apply

435
00:26:59.063 --> 00:27:01.954
TAM SAM SOM principle into your businesses

436
00:27:01.954 --> 00:27:03.354
How to use it?

437
00:27:03.354 --> 00:27:04.204
The step one

438
00:27:04.204 --> 00:27:07.603
Step one is you need to define your business idea very well

439
00:27:08.584 --> 00:27:10.284
What is your product services

440
00:27:10.284 --> 00:27:16.684
and what problem your products are

441
00:27:17.434 --> 00:27:20.834
So for example, if you are

442
00:27:20.834 --> 00:27:24.584
producing or delivering on-demand tutoring application

443
00:27:24.934 --> 00:27:27.034
for high school student think about it

444
00:27:27.034 --> 00:27:30.123
This is your product services again on-demand

445
00:27:30.903 --> 00:27:32.653
the tutoring application,

446
00:27:32.653 --> 00:27:36.374
through our mobile, mobile phone right for the high school student

447
00:27:36.984 --> 00:27:42.584
This is what is your Product service is

448
00:27:43.184 --> 00:27:44.584
So the step two

449
00:27:45.134 --> 00:27:49.184
You need to identify your total addressable market

450
00:27:49.734 --> 00:27:51.303
total addressable market

451
00:27:52.203 --> 00:27:59.464
So ask yourself, what is the broadest
possible market for your service in product?

452
00:28:00.014 --> 00:28:02.524
And who are all potential consumers?

453
00:28:03.024 --> 00:28:07.324
what is the total market size in dollar based or in user basis

454
00:28:07.624 --> 00:28:09.363
in your product in this case

455
00:28:09.613 --> 00:28:11.914
hypothetical product was on demand

456
00:28:13.094 --> 00:28:15.773
The tutoring application for the high school student

457
00:28:16.573 --> 00:28:19.973
So suppose that you target to the global market

458
00:28:19.973 --> 00:28:21.973
then how many people over there?

459
00:28:22.823 --> 00:28:26.323
How much they spend,

460
00:28:26.323 --> 00:28:30.074
how many days how much they spend for the tutoring service?

461
00:28:30.484 --> 00:28:36.784
We just calculated and all student aged 12 to 18 worldwide

462
00:28:36.784 --> 00:28:40.543
and then they spend 50 billion dollars for the tutoring service

463
00:28:40.743 --> 00:28:44.693
So there are 50 billion Industry exist already

464
00:28:44.893 --> 00:28:48.993
So this is a total addressable market which is 10

465
00:28:48.993 --> 00:28:50.493
for your hypothetical services

466
00:28:51.243 --> 00:28:52.663
And then step 3

467
00:28:52.983 --> 00:28:57.894
Once you identify your TAM you now you identify your SAM

468
00:28:58.234 --> 00:29:02.253
SAM is the service of available market and you ask yourself

469
00:29:03.104 --> 00:29:08.304
Who can you realistically serve your services today?

470
00:29:09.104 --> 00:29:11.954
in order to get this answer,

471
00:29:12.054 --> 00:29:16.793
You need to consider a geography and language and regulation or

472
00:29:17.664 --> 00:29:20.263
tech assess accessibility, etc

473
00:29:21.984 --> 00:29:25.384
For example, your services on demand

474
00:29:25.784 --> 00:29:28.994
tutoring application, then your SAM

475
00:29:29.144 --> 00:29:30.634
Your SAM would be

476
00:29:30.834 --> 00:29:34.663
urban high school student in English-speaking countries

477
00:29:35.563 --> 00:29:38.513
considering all the factors such as

478
00:29:38.513 --> 00:29:41.443
geography language regulation or tech

479
00:29:41.593 --> 00:29:44.143
considering all the factors

480
00:29:44.143 --> 00:29:48.014
and you just figure out your SAM would be

481
00:29:48.064 --> 00:29:52.364
urban high school student in English-speaking countries

482
00:29:52.714 --> 00:29:56.064
and then how much they spend for those types of service

483
00:29:56.364 --> 00:29:57.814
Yes, five billions

484
00:29:57.814 --> 00:30:01.383
So the five billion market exist as your SAM

485
00:30:01.683 --> 00:30:04.833
So the last step is to identify

486
00:30:04.833 --> 00:30:07.764
your serviceable obtained market, which is the SOM

487
00:30:09.983 --> 00:30:14.324
What portion of the SAM can you capture

488
00:30:15.183 --> 00:30:18.033
realistically in the near term?

489
00:30:18.033 --> 00:30:19.284
Near term means

490
00:30:20.313 --> 00:30:22.963
In the near future one or three years

491
00:30:23.313 --> 00:30:28.863
So how many consumers can you realistically acquire in next

492
00:30:29.263 --> 00:30:31.263
one or three years?

493
00:30:31.263 --> 00:30:32.864
This is SAM

494
00:30:33.254 --> 00:30:37.004
What about your hypothetical cases in this case, online tutoring?

495
00:30:37.564 --> 00:30:42.814
On demand tutoring the mobile application
service for high school student

496
00:30:42.814 --> 00:30:48.453
You identify five billion dollars as SAM

497
00:30:49.053 --> 00:30:53.183
What about just 1% out of SAM?

498
00:30:53.183 --> 00:30:58.113
Then you got your SOM, how much is it?

499
00:30:58.813 --> 00:31:00.513
1% out of 5 billion

500
00:31:00.513 --> 00:31:04.684
You just target to the 50 million dollars as a SOM

501
00:31:04.784 --> 00:31:07.934
So you're target market would be 50 million dollars market

502
00:31:08.684 --> 00:31:11.134
What do you think? It's a pretty simple, right?

503
00:31:11.284 --> 00:31:13.854
And can you apply the TAM SAM SOM principle?

504
00:31:14.604 --> 00:31:19.004
When you calculate your target market, don't be afraid to apply

505
00:31:19.643 --> 00:31:21.993
TAM SAM SOM principle

506
00:31:21.993 --> 00:31:24.133
It will be very helpful