Determining your Total Addressable Market (TAM) for Government - IQT Webinar Recap
Late last year, I had the opportunity to participate in an In-Q-Tel (IQT) webinar and present the concept and value of determining the Total Addressable Market (TAM) for Government to IQT portfolio companies.
For those that are unfamiliar with IQT, the organization is essentially a venture fund that supports the US Government’s Intelligence Community (IC). The organization works with quite a few innovative companies and technologies all trying to grow their Government business.
One of the main challenges each of these organizations face when trying to sell to Government, is where to invest their limited sales resources to ensure the greatest and quickest likelihood of return (Everyone has dealt with long sales cycles that in the end don’t lead to a contract).
This is where the concept of the TAM for Government can assist. In the commercial space, the TAM is everyone/every organization that a company could potentially sell to, the TAM we at Marion Square have developed for Government, takes this to a more detailed level. Since Government agencies are strictly confined by their budget cycles and certification requirements (think FedRAMP) we believe organizations should take these items into consideration when developing their TAM.
Tips for developing a Government TAM:
Understand the big Government initiatives with associated time frames (Ex. Executive Order 14028 “Improving the Nation’s Cybersecurity” states that all Federal Agencies must have a Zero Trust Architecture in place by the end of FY24).
Map to the agency’s budgets - the FY24 budget requests are all available on the agency’s website - read through these budgets and find the programs and projects associated with your technology. This will provide you with great insights into how much funding the agency will be spending this year.
Know what is required to pursue opportunities that have been funded. For example, if you offer a cloud-based service, will it require FedRAMP and at what level? Or, if you are pursuing work at the VA, will you require a Service-Disabled Veteran certified business as a partner?
We have worked with companies in the past that believe there will be an enormous TAM for their product only the be disappointed when they realize they don’t qualify to pursue some of the work based on required certifications or a lack of budget in a given Government fiscal year and vice versa.
If you do your homework up front, you will understand which agencies are spending and what the requirements are to pursue the contracts. This will allow an organization to allocate the appropriate resources to pursue the appropriate opportunities.
For more insight on Marion Square and how we develop TAMs for our clients check out our website at www.marion-square.com