Dalton Caldwell: evaluation

Transcript context

…Specifically when you're evaluating startups. I wasn't going to go into this, but I think it might be interesting, is market size. How do you think about the importance of large TAM as an investor YC? I think it really depends on what stage you're investing at and it's absolutely critical the later stage you get. Right? If you're going to invest in a very high valuation, it is really important. The earlier you go, the less it matters. And some of the most phenomenally good startups, if you were really pedantic about it, the TAM would be tiny. The TAM of Uber would be nothing, right? The TAM of Airbnb would've been nothing. TI funded Razorpay, which is I think the largest payment processor in India, and the TAM of that was tiny because no one was using credit cards in 2015 in India. So you had to believe that the size of the credit card industry in India would 100X. Well, guess what happened? You know what I'm saying? So I'm not saying that having a large market someday doesn't matter, of course it does eventually. But trying to be super pedantic about market size when it's a pre-seed company or someone applying to YC, it's just not something I'd put a lot of thought. And again, Whatnot. What's the TAM of the collectible Funko Pop industry? I don't know. I don't think it's that big, man. I don't know if you did that analysis when you invested, but I think is pretty small, but I wasn't worried about it. That was the last thing I was worried about. It makes so much sense that at YC you don't think about it that much because of, as you said, many startups pivot anyway. So if you like the team-…

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