$0 TAM Lie: Why Startups Are Wasting Months Chasing Fake ICPs

Read time: 3 minutes.

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Every founder loves the idea of a massive TAM.

Especially when ChatGPT or a pitch deck tells you your product “could serve 200M professionals across 80 countries.”

But here’s the lie:

And if your ICP is fake, your funnel is doomed before it begins.

[1] How the $0 TAM Gets Created

Today, startups build ICPs like this:

• Use AI tools to scrape job titles + firmographics

• Input into ChatGPT: “Who buys CRM tools in LATAM?”

• Build outbound lists + SEO pages targeting them

• Realise 3 months later: no one’s converting

Why?
Because TAM ≠ SAM ≠ Ready-to-Pay ICP.

[2] Signs You’re Chasing a Fake ICP

They tick all your filters
But they ghost your emails
Don’t activate in free trials
Never show budget intent

Examples:

• SMBs with no buying power are being sold $10k/yr tools

• Creators are being pitched on enterprise-style onboarding

• Developers are being routed through SDRs instead of docs

[3] The Root Cause: Misaligned GTM Design

Even if the persona is real, your motion might be wrong.

You can’t:

• Push PLG to accounts that need hands-on onboarding

• Run outbound to leads that need to self-educate

• Expect $99 ACV users to justify a call with sales

Real ICP = Buyer + Motion + Timing
Not just demographic fit.

[4] What To Do Differently Now

Inside Salesflow and with other SaaS teams I advise, we’ve adapted:

• Tiered ICPs:
  → Tier 1: known converters
  → Tier 2: similar traits, test gated
  → Tier 3: audience, not buyers (e.g. readers, followers)

• Intent-Gated Spend
  → SEO/PPC budgets only unlocked if audience shows a signal
  → Outreach tested with signal copy before going full scale

• GTM → ICP Fit Review
  → Every month, we map funnel metrics per ICP segment
  → If trial activation or CAC payback is broken, we kill it

Final Words

Your Total Addressable Market might be big.

But your Total Addressable Converters?
Much smaller and infinitely more valuable.

Before you build content, ad spend, or SDR lists…

If not, you're not in a market.
You're in a mirage.

That's it for today's article! I hope you found this essay insightful.

Wishing you a productive week ahead!

I always appreciate you reading.

Thanks,
Chintankumar Maisuria