[hristov]

I can give an obvious answer to that first question. It is because there is no centralised clearing house for tickets, and in order to arbitrage them one would have to buy them from individuals which ends up being very costly. People will not send the correct tickets, they will send fake tickets, they will claim they sent the tickets when you have not received them, etc. It is not a coincidence that almost every auction site out there requires the parties to do the final exchange among themselves.

As far as TAM goes, well I do not think it is fatal if a start up does not know what that particular acronym means. A good investor would calculate that themselves anyway. One would have to be very gullible to believe the TAM estimations of the average company looking for funding (they all say everything is a 100 billion dollar market).

[jfarmer]

Yes, sure, a good answer which amounts to: transaction costs are higher than the variance. That's the answer they should have given Paul.

TAM answers the question, "In the best of all possible worlds, how much money would you make?"

As an entrepreneur you'd better have a good, if not totally accurate, answer to that question. At the very least it shows investors how well you've segmented and sized your target market.