I think SOM is more of a narrative tool that helps you explain part of your market approach rather than a binary classifier that either leads to or away from fundability. Specifically in healthcare, there's a great passage [1] in an article by Steve Kraus, who's one of the most well regarded startup healthcare investors that I think has stood the test of time and at least expresses part of Bessemer's thinking on this pretty insightfully:
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Healthcare represents approximately 18% of US GDP or, in other terms, $3.6 trillion of annual spending, and continues to grow by low, single-digit percentages each year. Despite the impressive scale of the US healthcare industry, not a single healthcare company has a $3.6T total addressable market (TAM).
Instead, healthcare looks a lot more like several thousand billion-dollar markets that include everything from healthcare technology, commercial and government-sponsored care to drugs, medical equipment, home health services, out of pocket costs, and more, all of which together comprise the $3.6T industry figure.
Comments
I think SOM is more of a narrative tool that helps you explain part of your market approach rather than a binary classifier that either leads to or away from fundability. Specifically in healthcare, there's a great passage [1] in an article by Steve Kraus, who's one of the most well regarded startup healthcare investors that I think has stood the test of time and at least expresses part of Bessemer's thinking on this pretty insightfully:
```
Healthcare represents approximately 18% of US GDP or, in other terms, $3.6 trillion of annual spending, and continues to grow by low, single-digit percentages each year. Despite the impressive scale of the US healthcare industry, not a single healthcare company has a $3.6T total addressable market (TAM).
Instead, healthcare looks a lot more like several thousand billion-dollar markets that include everything from healthcare technology, commercial and government-sponsored care to drugs, medical equipment, home health services, out of pocket costs, and more, all of which together comprise the $3.6T industry figure.
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[1] https://www.bvp.com/atlas/roadmap-10-laws-of-healthcare