Investment Attraction: Investors often look at TAM to gauge the potential return on investment. A larger TAM indicates a larger potential market, which can make a business more attractive to venture capitalists and angel investors. Strategic Planning: Understanding TAM allows entrepreneurs to set realistic business goals and strategies. It helps in identifying target markets and prioritizing resources effectively. Market Validation: A comprehensive TAM analysis can validate the demand for a product or service. This is essential for market research and understanding the competitive landscape.