The Adaptation Economy Has a TAM Problem

💡 This is my third Climate Proof opinion column — where I’ll share editorials, news analysis, and hot takes. Apologies for the late running of this edition. Did you miss the previous two articles? Read them HERE and HERE.

Questions? Thoughts on today’s column? Email me at [email protected]

I’ve always thought the concept of ‘Total Addressable Market’ (TAM) to be a little funky. You can perform all the spreadsheet magic you want, but the revenue opportunity calculated is only ever going to be a rough approximation — and an entirely theoretical anchor for your ambitions.

Still, big numbers excite investors and grab headlines, so much so that ‘TAM-Maxxing’ is now a thing, as aptly demonstrated by the CEO of AI lab Anthropic the other week, who pegged his company’s TAM at some US$30trn, or about a quarter of the world’s GDP.

What is the TAM of adaptation? Recent developments have me wondering at the number, and whether it’s currently much, much smaller than the ‘Adaptation Gap’ (which you could call ‘Total Addressable Need’) trumpeted in UN-backed reports.

In the course of the last few weeks, we’ve seen an adaptation tech darling, ClimateAI, close its doors. Then the US office of Systemiq shuttered, barely a year after launching with a mission to unlock “the economic potential of resilience.”