The Market Is Huge. So What?

No bank, bondholder or counterparty in finance would accept a promise of money with no date attached to it. Offer someone a thousand pounds and refuse to say when it will arrive, and you have not really made them an offer. You have asked them to wait on your terms. The entire apparatus of finance, discounting, duration and present value, exists because a sum of money is not worth the same at every point in time. The only way to know what it is actually worth is to know when it lands. A cash flow without a date is not conservative, it is not vague, it is meaningless, because there is no way to price it.

Now sit in almost any innovation pitch meeting and watch a founder do exactly this in front of a room that would never accept it anywhere else. Three circles appear on a slide: total addressable market, serviceable addressable market and serviceable obtainable market. The final number, the one the founder actually expects to capture, is stated as a sum of money with no date attached to it. Two hundred million dollars, obtainable, full stop. Nobody in the room asks by when, even though nobody would accept an undated cheque. That is the strange part, because everyone in the room already knows how to price time. They do it every time they build a model, discount a future cash flow back to today or argue about a multiple. The discipline exists. It simply does not get applied to the one number in the deck where it may matter most.

It is worth being precise about this, because it is not the same complaint people usually make about these slides. The common criticism is that the numbers are too big,