Unleashing Human Potential: From TAM to Cognitive Revolution

Unleashing Human Potential: From TAM to Cognitive Revolution

Introduction:

In the world of startups and venture investments, the concept of Total Addressable Market (TAM) has long been considered a crucial factor in determining success. However, a closer look at the early years of some of the most successful companies reveals that TAM alone may not be the best indicator of potential. This article explores the limitations of TAM and delves into the significance of the "cognitive revolution" in human history, drawing parallels between the two to shed light on how we can unleash our true potential.

Reevaluating TAM:

Many exceptional venture investments in their early stages would have had relatively small or undefined TAMs. The reason for this lies in the fact that the most successful companies fundamentally change the markets in which they operate. Instead of solely relying on TAM calculations, investors should consider other factors like credible adjacencies and nascent market potential. By not letting TAM numbers dictate their decisions, entrepreneurs can build something truly groundbreaking.

The Cognitive Revolution: A Key to Human Success:

Approximately 70,000 years ago, Homo sapiens experienced a "cognitive revolution" that set them apart from other species and allowed them to thrive and spread across the planet. This revolution, as described by Yuval Noah Harari, author of "Sapiens," was a turning point in human history. It gave us the ability to share, store, and build upon information, paving the way for collective learning.

Collective Learning and Imaginative Power:

The concept of collective learning, as proposed by David Christian in his theory of Big History, highlights how the ability to unite millions of strangers around shared myths differentiates us as humans. Ideas such as freedom, human rights, gods, laws, and capitalism exist in our imaginations, yet they have the power to bind us together and motivate us to cooperate on complex tasks. Our imaginative capacity is what allows us to create and believe in these shared myths that shape our societies.

Beyond Agriculture: Recognizing the Benefits:

Critics of the shift to agriculture often label it as a "mistake," but this perspective overlooks the advancements that came with it. Farming societies were able to specialize, leading to the development of written languages, new technologies, and art. These are all aspects of civilization that we value and cherish today. The transition to agriculture was not a mistake; it was a stepping stone towards progress and innovation.

Unlocking Our Potential: Three Actionable Advice:

• 1. Embrace Uncertainty: Instead of solely relying on TAM calculations, consider the potential for market disruption and the creation of new opportunities. The best companies challenge the status quo and redefine their markets. Don't let TAM numbers limit your vision and ambition.

• 2. Foster Collective Learning: Recognize that our ability to share and build upon information is what sets us apart as humans. Encourage collaboration and the exchange of ideas to unlock new possibilities and drive innovation.

• 3. Embrace Change: Just as the shift to agriculture brought about significant advancements, embrace change and adaptability in your personal and professional life. Embrace new technologies, ideas, and ways of thinking to stay ahead in an ever-evolving world.

Conclusion:

While TAM can provide valuable insights, it should not be the sole determinant of success in the startup world. By exploring the parallels between the limitations of TAM and the cognitive revolution in human history, we can understand the importance of challenging existing norms and embracing our imaginative power. To unlock our true potential, we must not let numbers or past conventions hinder our ability to innovate and shape the future. Embrace uncertainty, foster collective learning, and embrace change to unleash your full potential.