Lenny RachitskyHost of Lenny's Podcast | Author of Lenny's Newsletter

TAM is the last thing YC worries about?

25 Aug 2026 · 1 min

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In this brief monologue, a YC investor explains that the importance of total addressable market (TAM) varies with the investment stage. For very early‑stage companies—pre‑seed or YC applicants—TAM is a low priority, as many successful startups (e.g., Uber, Airbnb) started with seemingly tiny markets. While a large market will matter eventually for growth and exit potential, the investor stresses that being overly pedantic about market size at the earliest stages is not a primary concern when evaluating YC candidates.

How do you think about the importance of large TAM as an investor at YC? I think it really depends on what stage you're investing at. The earlier you go, the less it matters. And some of the most phenomenally good startups, like the TAM of Uber would be like nothing. The TAM of Airbnb would have been nothing. I'm not saying having a large market someday doesn't matter. Of course it does eventually, but trying to be super pedantic about market size when it's like a pre-seed company or someone applying to YC, that was like the last thing I was worried about.