From the market size of one product to the market size of wellness

Many people think TAM, SAM and SOM are lofty, new terms. In fact, with my years of management experience, I have applied this model since the early days of HOPE CORP. What differs is the angle: the me of yesterday and the me of today look at the same yardstick in two very different ways.

The old view: sizing a product

When HOPE focused only on a fermented beverage line, I sized the market on the F&B industry, the refreshment segment. The number was large, but limited. Wherever I looked, I saw competitors selling beverages and nutrition products, and the share of the market was divided into very small slices.

The new view: sizing an ecosystem

Sitting down with Mr. Hải H Nguyễn (Forbes Under 30 Asia 2017, Founder and Fundraising Coach at BeginGuru) to restructure the company around a capital-mechanism mindset, I did not relearn the definitions. I recalculated the game. When HOPE shifted to offering a complete solution of education, products and community, all three measures changed:

• TAM (total addressable market): no longer confined to beverages. HOPE now sits in the proactive health and lifestyle education sector (the wellness economy), where the scale and revenue ceiling are many times larger.
• SAM (serviceable market): I target knowledge workers, office employees and companies nationwide, people willing to pay not only for what they eat but for their minds (knowledge) and their bodies (lasting wellbeing).
• SOM (obtainable market): the share that HOPE's three-pillar ecosystem can realistically capture in the near term.

The lesson: same company, but change the business model and the market size changes with it. The larger the market, the more room there is for valuation.

Competitors and solution: leaving the red ocean

When I only sold beverages, my competitors were thousands of drink brands. Competing on price and shelf position is exhausting. But once I expanded to a complete solution, I found my own path, closer to what is called a blue ocean:

• Problem: customers do not lack things to drink. They lack the knowledge and discipline to live well.
• Solution: HOPE provides courses, an environment and companions to change mindsets; plant-based products to nourish the body; and a community to sustain discipline.
• Competitors: far fewer direct ones. We do not compete with beverage sellers. We compete with the customer's own industrialized habits.

Closing thought

Knowledge is the foundation, but how you apply it to your business model is what determines the stature of a company. I still use the same TAM-SAM-SOM yardstick, but today I use it to measure a taller mountain and a bigger ambition: the HOPE CORP ecosystem.

If you are a founder, look again at your own company: are you sizing a single product, or a larger vision?