School Notes

CSC454 Lecture 3

Market Opportunities + Customer Segmentation

When we're talking about how big the opportunity is, there are three market size estimates:

  1. Total Addressable Market (TAM): Value of ALL buyer/seller relationships

  2. Served Addressable Market (SAM): The value of the customers for whom your business has the strongest value proposition.

  3. Target Market: The specific people within those customers you want to appeal to the most.

When you're trying to figure out your target market, keep in mind that you want to start with 1-2% of your TAM. Serve your SAM really well, and then expand out from there. Focusing on your niche makes it much easier to gain traction. You need to figure out what the gains and pains of your customer base are, and what jobs they do in a day.

The pains are the things that make their lives annoying. Their fears, frustrations, and obstacles. The gains are the things that they enjoy doing, the wants, the needs, and the measures of success that they have.

Customer Needs


  • the present customer experience
  • the ideal customer experience
  • the gap between the present and ideal
  • the customer beliefs about the buying process for your application
  • what barriers stop potential customers
  • what are the opportunities to enhance their experience


There are many ways you can divide your TAM up to figure out who your SAM should be. Geographic, demographic, psychographic (social class, lifestyle

  • personality), and behavioural (events, buying patterns) segmentations all exist.

Business Model

Break down the business model canvas. For each part of it, write two or three sentences in response.