Expansion FAQ: what the acronyms mean and why consultants (usually) use them wrong

A description of the company (or person) most likely to buy from you, stay with you, and refer you.

A consultant creates a beautiful document with demographics, industry, and company size. But if you're in a new market and have no customers yet (or just a few), your ICP is only a hypothesis, not a fact. That's exactly how you need to treat it.

Before investing in outreach to hundreds of companies, identify 5–10 that most closely match your best existing customer. Start there.

Until you have enough information about your local customers and their needs — even if you're 100% sure the whole market is waiting for your product — don't scale acquisition. A bad outreach message sent to even the right customer will very likely burn them. A second chance is hard to get.

TAM numbers are always astronomical and consultants love quoting them in decks. ("If it's not 100 billion, don't even call!") But TAM is useless if you compare apples to oranges and don't know how to reach your first ten customers. SOM — the only number that really matters at the start — is often deliberately vague.

No top-down approach. Arguments like "we got it from a McKinsey report" don't work. Map the competition, their offering, and their revenue. You must know exactly what your number is built from.

Setting SAM correctly requires thorough competitive research. The SAM coefficient equals the overlap between your assortment and the competitor's assortment — direct and indirect. A common mistake is a wrong market size estimate — which leads to a wrong conclusion: "the market is huge, we'll grow 50% per year." Maybe, maybe not — most often unfortunately not, because the real market is many times smaller. Also watch the definition of competition — what matters isn't just what, but how. If your B2B customer buys from both competitor A and B, and you only sell B, your chance of winning that customer is almost zero.

I'm a wooden furniture manufacturer and any wooden furniture sold in Poland is my SAM. Wrong! Only furniture sold at similar prices (to a similar customer) and made from similar components — that's your SAM. A solid-wood manufacturer cannot include IKEA in the analysis.

A company makes gastro furniture and professional cooking equipment. On the Polish market, however, it wants to sell only cooking equipment — an absolutely rational decision from a unit economics point of view. And here comes the BUT: a typical Polish distributor builds his business on stainless steel furniture — it's a key and high-turnover item for him. Without it, he's simply not interested. The result: under normal conditions, the Czech company won't sell cooking equipment alone to Polish distribution. Not because their machines are bad — they may be better and cheaper than the competition. The problem is that without a complete assortment, the Polish partner won't take such an offer seriously. From the distributor's point of view, it makes no logistical or economic sense to fragment suppliers.

The plan for how you get your product to the customer — channels, message, price, timing.

Few people truly understand GTM. It's generally assumed that the more GTM slides, the better. It contains beautiful frameworks, priority matrices, and roadmaps. One thing is missing — contact with a real customer who would say "yes, I need this."

GTM is nothing more than your strategy. What you solve, for whom, at what price, and how you deliver the message. What channels you use to bring the product to market. Yes, it's the good old 4P — just in new packaging.

GTM must be clear and understandable. Everything must be obvious and backed by data — pricing and product strategy, acquisition, distribution channel. Goals and budgets must be set.

The average annual growth rate of a market over several years, taking compound interest into account.

CAGR is completely ignored. Yet if you're building a 3–5 year strategy and the market grows meanwhile, in five years it will be a completely different market — different size, different competition, different price level.

In traditional industries, count on CAGR around 3–7%. Average growth of 5% per year over five years means a total market increase of 28% thanks to compound interest. That means your TAM, SAM, and SOM will all grow significantly during the lifetime of your strategy — and you need to account for this shift from the very beginning.