Bill Gurley on why founders and investors shouldn't pay too much attention to TAM

There's a famous, I think NYU professor, Aswath. His last name's not coming to me right now, but he's famous for valuation work. He's always on cnbc. And he wrote a piece that said Uber wouldn't be worth more than, I don't know, if it was 2 or 3 billion dollars. And I wrote a reply called how to Miss by a Mile. Aswath Damodaran, I believe. Yeah, he's wonderful. I called him before I published it just because I like to tell him it was coming. But it was a classic mistake. He basically took the taxi market and said, that's the upper limit. And that's just the wrong math. Like, Travis and the team made this thing so convenient and so available that it was a product that's 10x better than the taxi market. And so the usage. And by the time I wrote that, already knew that Uber in San Francisco was 20x bigger than the taxi market in San Francisco. Cisco. Yeah. So I already knew he was wrong with that analysis. We'd already blown through it. Yeah, but he didn't know that. And so. Yeah, and I mentioned in that article there's a couple of classic examples of this. There was one where McKenzie was hired to calculate the global market for mobile phones and got came back with 900,000 is the upper limit. And I have found you get into more trouble with this kind of TAM conservatism than it hurts you more than it helps you as an investor. If you feel like something's super disruptive and it's unlocking things like your optionality to build on top of that is going to be pretty spectacular.