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Blitzscaling: The Lightning-Fast Path to Building Massively Valuable Companies
Foreword by Bill Gates
LinkedIn cofounder, legendary investor, and host of the award-winning Masters of Scale podcast reveals the secret to starting and scaling massively valuable companies.
What entrepreneur or founder doesn’t aspire to build the next Amazon, Facebook, or Airbnb? Yet those who actually manage to do so are exceedingly rare. So what separates the startups that get disrupted and disappear from the ones who grow to become global giants?
The secret is a set of techniques for scaling up at a dizzying pace that blows competitors out of the water. The objective of Blitzscaling is not to go from zero to one, but from one to one billion –as quickly as possible.
When growing at a breakneck pace, getting to next level requires very different strategies from those that got you to where you are today. In a book inspired by their popular class at Stanford Business School, Hoffman and Yeh reveal how to navigate the necessary shifts and weather the unique challenges that arise at each stage of a company’s life cycle, such how to design business models for igniting and sustaining relentless growth; strategies for hiring and managing; how the role of the founder and company culture must evolve as the business matures, and more.
Whether your business has ten employees or ten thousand, Blitzscaling is the essential playbook for winning in a world where speed is the only competitive advantage that matters.
LinkedIn cofounder, legendary investor, and host of the award-winning Masters of Scale podcast reveals the secret to starting and scaling massively valuable companies.
What entrepreneur or founder doesn’t aspire to build the next Amazon, Facebook, or Airbnb? Yet those who actually manage to do so are exceedingly rare. So what separates the startups that get disrupted and disappear from the ones who grow to become global giants?
The secret is a set of techniques for scaling up at a dizzying pace that blows competitors out of the water. The objective of Blitzscaling is not to go from zero to one, but from one to one billion –as quickly as possible.
When growing at a breakneck pace, getting to next level requires very different strategies from those that got you to where you are today. In a book inspired by their popular class at Stanford Business School, Hoffman and Yeh reveal how to navigate the necessary shifts and weather the unique challenges that arise at each stage of a company’s life cycle, such how to design business models for igniting and sustaining relentless growth; strategies for hiring and managing; how the role of the founder and company culture must evolve as the business matures, and more.
Whether your business has ten employees or ten thousand, Blitzscaling is the essential playbook for winning in a world where speed is the only competitive advantage that matters.
336 pages, Hardcover
First published October 9, 2018
About the author
Reid Hoffman
26 books673 followersAn accomplished entrepreneur, executive, and investor, Reid Hoffman has played an integral role in building many of today’s leading consumer technology businesses, including LinkedIn and PayPal. He possesses a unique understanding of consumer behavior and the dynamics of viral businesses, as well as deep experience in driving companies from the earliest stages through periods of explosive, “blitzscale” growth. Ranging from LinkedIn to PayPal, from Airbnb to Convoy to Facebook, he invests in businesses with network effects and collaborates on building their product ecosystems.
Hoffman co-founded LinkedIn, the world’s largest professional networking service, in 2003. LinkedIn is thriving with more than 700 million members around the world and a diversified revenue model that includes subscriptions, advertising, and software licensing. He led LinkedIn through its first four years and to profitability as Chief Executive Officer. In 2016 LinkedIn was acquired by Microsoft, and he became a board member of Microsoft.
Prior to LinkedIn, Hoffman served as executive vice president at PayPal, where he was also a founding board member.
Hoffman joined Greylock in 2009. He focuses on building products that can reach hundreds of millions of participants and businesses that have network effects. He currently serves on the boards of Aurora, Coda, Convoy, Entrepreneur First, Joby, Microsoft, Nauto, Neeva, and a few early stage companies still in stealth. In addition, he serves on a number of not-for-profit boards, including Kiva, Endeavor, CZ Biohub, New America, Berggruen Institute, Opportunity@Work, the Stanford Institute for Human-Centered AI, and the MacArthur Foundation’s Lever for Change. Prior to joining Greylock, he invested personally in many influential Internet companies, including Facebook, Flickr, Last.fm, and Zynga.
In 2022, Hoffman co-founded Inflection AI, an artificial intelligence company that aims to create software products that make it easier for humans to communicate with computers.
Hoffman is the host of Masters of Scale, an original podcast series and the first American media program to commit to a 50-50 gender balance for featured guests as well as Possible, a podcast that sketches out the brightest version of the future—and what it will take to get there. He is the co-author of five best-selling books: The Startup of You, The Alliance, Blitzscaling, Masters of Scale, and Impromptu.
Hoffman earned a master’s degree in philosophy from Oxford University, where he was a Marshall Scholar, and a bachelor’s degree with distinction in symbolic systems from Stanford University. In 2010 he was the recipient of an SD Forum Visionary Award and named a Henry Crown Fellow by The Aspen Institute. In 2012, he was honored by the Martin Luther King center’s Salute to Greatness Award. Also in 2012, he received the David Packard Medal of Achievement from TechAmerica and an honorary doctor of law from Babson University. In 2017, he was appointed as a CBE by her majesty Queen Elizabeth II. He received an honorary doctorate from the University of Oulu, an international science university, in 2020. In 2022, Reid received Vanderbilt University's prestigious Nichols-Chancellor's Medal and delivered the Graduates Day address to the Class of 2022 on the importance and power of friendship.
Hoffman co-founded LinkedIn, the world’s largest professional networking service, in 2003. LinkedIn is thriving with more than 700 million members around the world and a diversified revenue model that includes subscriptions, advertising, and software licensing. He led LinkedIn through its first four years and to profitability as Chief Executive Officer. In 2016 LinkedIn was acquired by Microsoft, and he became a board member of Microsoft.
Prior to LinkedIn, Hoffman served as executive vice president at PayPal, where he was also a founding board member.
Hoffman joined Greylock in 2009. He focuses on building products that can reach hundreds of millions of participants and businesses that have network effects. He currently serves on the boards of Aurora, Coda, Convoy, Entrepreneur First, Joby, Microsoft, Nauto, Neeva, and a few early stage companies still in stealth. In addition, he serves on a number of not-for-profit boards, including Kiva, Endeavor, CZ Biohub, New America, Berggruen Institute, Opportunity@Work, the Stanford Institute for Human-Centered AI, and the MacArthur Foundation’s Lever for Change. Prior to joining Greylock, he invested personally in many influential Internet companies, including Facebook, Flickr, Last.fm, and Zynga.
In 2022, Hoffman co-founded Inflection AI, an artificial intelligence company that aims to create software products that make it easier for humans to communicate with computers.
Hoffman is the host of Masters of Scale, an original podcast series and the first American media program to commit to a 50-50 gender balance for featured guests as well as Possible, a podcast that sketches out the brightest version of the future—and what it will take to get there. He is the co-author of five best-selling books: The Startup of You, The Alliance, Blitzscaling, Masters of Scale, and Impromptu.
Hoffman earned a master’s degree in philosophy from Oxford University, where he was a Marshall Scholar, and a bachelor’s degree with distinction in symbolic systems from Stanford University. In 2010 he was the recipient of an SD Forum Visionary Award and named a Henry Crown Fellow by The Aspen Institute. In 2012, he was honored by the Martin Luther King center’s Salute to Greatness Award. Also in 2012, he received the David Packard Medal of Achievement from TechAmerica and an honorary doctor of law from Babson University. In 2017, he was appointed as a CBE by her majesty Queen Elizabeth II. He received an honorary doctorate from the University of Oulu, an international science university, in 2020. In 2022, Reid received Vanderbilt University's prestigious Nichols-Chancellor's Medal and delivered the Graduates Day address to the Class of 2022 on the importance and power of friendship.
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December 19, 2018
The third book by tech entrepreneur and venture capitalist, Reid Hoffmann, is a primer on how massively valuable businesses are built. The technique that many big companies in the internet age have used to grow in value is termed "blitzscaling" - a completely made up term, that may become popular parlance as the book gains popularity.
Well written with lots of anecdotes forged from both personal experience and obvious friendships with some of the most powerful figures in Silicon Valley, Blitzscaling goes into incredible detail about how to achieve scale in the tech business and what could work in other industries too.
Key Takeaways
PART I: WHAT IS BLITZSCALING?
Blitzscaling is both the general framework and the specific techniques that allow companies to achieve massive scale at incredible speed. When you blitzscale, you make decisions and commit to them even though your confidence level is substantially lower than 100%. You accept the risk of making the wrong decision and willingly pay the cost of significant operating inefficiencies in exchange for the ability to move faster. These risks and costs are acceptable because the risk and cost of being too slow is even greater.
Blitzscaling requires more than just courage and skill. It also requires an environment that is willing to finance intelligent risks with both financial capital and human capital, the essential ingredients.
Growth alone is not blitzscaling; blitzscaling is prioritizing speed over efficiency in the face of uncertainty.
Classic start-up growth prioritizes efficiency in the face of uncertainty.
Classic scale-up growth focuses on growing efficiently once the company has achieved certainty about the environment.
Fastscaling means that you’re willing to sacrifice efficiency to increase your growth rate. However, because fastscaling takes place in an environment of certainty, the costs are well understood and predictable.
Blitzscaling means that you’re willing to sacrifice efficiency for speed, but without waiting to achieve certainty on whether the sacrifice will pay off.
The sequence that companies like Google and Facebook have gone through begins with classic start-up growth while establishing product/market fit, then shifts into blitzscaling to achieve critical mass and/or market dominance, then relaxes to fastscaling as the business matures and finally downshifts to classic scale-up growth when the company is an industry leader.
The 3 basics of Blitzscaling
1. It is an offensive and a defensive strategy
2. It thrives on positive feedback loops in that the company that grows to scale first reaps significant competitive advantage
3. It comes with massive risks.
The 5 stages of Blitzscaling
Stage 1 (Family) 1–9 employees
Stage 2 (Tribe) 10s of employees
Stage 3 (Village) 100s of employees
Stage 4 (City) 1000s of employees
Stage 5 (Nation) 10000s of employees.
3 key techniques of Blitzscaling
1. BUSINESS MODEL INNOVATION- design an innovative business model that can truly grow. Technology is no longer as strong a differentiator, while figuring out the right combinations of services to bring together into a breakthrough product has become a major differentiator
2. STRATEGY INNOVATION - know what you plan to do and also what you plan NOT to do.
3. MANAGEMENT INNOVATION - a company’s business model describes how it generates financial returns by producing, selling, and supporting its products.
PART II: BUSINESS MODEL INNOVATION
Most great business models have certain characteristics in common. If you want to find your best business model, you should try to design one that maximizes 4 key growth factors and minimizes 2 key growth limiters.
- growth factor #1: market size -a big market has both a large number of potential customers and a variety of efficient channels for reaching those customers. If a company can’t achieve “venture scale” (generally, a market of at least $1 billion in annual sales), then most VCs won’t invest.
When evaluating market size, account for how lower costs and product improvements can expand markets by appealing to new customers, in addition to seizing market share from existing players.
- growth factor #2: distribution - distribution techniques fall into two general categories: leveraging existing networks and virality.
- growth factor #3: high gross margins - the higher the gross margin, the more valuable each dollar of sales is to the company because it means that for each dollar of sales, the company has more cash available to fund growth and expansion. Also, high-gross-margin businesses are attractive to investors, who will often pay a premium for their cash-generating power. Most of a company’s operational challenges scale based on revenues or unit sales volume, not gross margin.
- growth factor #4: network effects - sustaining that growth long enough to build a massively valuable and lasting franchise. A product or service is subject to positive network effects when increased usage by any user increases the value of the product or service for other users.
Network effects generate a positive feedback loop that results in superlinear growth and value creation. This superlinear effect makes it very difficult for any node in the network to switch from an incumbent to an alternative (“customer lock-in”), since it is almost impossible for any new entrant to match the value of plugging into the existing network.
Direct Network Effects: increases in usage lead to direct increases in value
Indirect Network Effects: increases in usage encourage consumption of complementary goods, which increases the value of the original product.
two-Sided Network Effects: Increases in usage by one set of users increases the value to a different set of complementary users, and vice versa
Local Network Effects: Increases in usage by a small subset of users increases the value for a connected user
Compatibility and Standards: The use of one technology product encourages the use of compatible products.
- growth limiter #1: lack of product/market fit
- growth limiter #2: operational scalability
Proven Business Models Patterns
1. Bits rather than atoms - bits-based businesses have a much easier time serving a global market, which in turn makes it easier to achieve a large market size.
2. Platforms - if a platform achieves scale and becomes the de facto standard for its industry.
3. Free or freemium - without third-party revenue, the problem with offering your product to users for free is that you can’t offset your lack of sales by “making it up in volume.”
4. Marketplaces - often tap into two-sided network effects.
5. Subscriptions - subscription Internet services have been successful because the sales and delivery model provides a larger market size and better distribution than traditional packaged software.
6. Digital good - digital goods tend to have nearly 100 percent gross margins.
7. Feeds - eg Facebook's news feeds
Underlying the proven patterns of business model innovation are larger principles that can help refine those patterns or even create new ones.
- Automation - computers are almost always faster, cheaper, and more reliable than human beings.
- Adaptation not optimization - practice continuous improvement
- The contrarian principle - "Brilliant thinking is rare, but courage is in even shorter supply than genius" (Peter Thiel). if your company is pursuing an opportunity that conventional wisdom ignores or disdains, you will probably have the time you need to refine your business model innovation into a well-oiled machine
PART III: STRATEGY INNOVATION
A few factors if you are wondering whether the time is right for your company to blitzscale:
1. A big new opportunity - one where the market size and gross margins intersect to create enormous potential value, and there isn’t a dominant market leader or oligopoly.
2. First scaler advantage - the most frequent offensive reason for blitzscaling is to achieve a critical mass that confers a lasting competitive advantage.
3. Learning curve - be the first to climb a steep learning curve.
4. Competition - the most common driver of blitzscaling is the threat of competition. The more intense the competition, the faster you should try to move.
5. Good times, bad times - you can successfully blitzscale in both good times, and bad times, though market conditions can and should affect your strategy. If your market stops growing or reaches its upper limit, you should stop blitzscaling.
The best time to choose not to blitzscale is when you’re pursuing a relatively low-margin business model that investors are unwilling to fund at all, unwilling to fund at scale, or unwilling to fund quickly—like, say, a fine-dining restaurant
PART IV: MANAGEMENT INNOVATION
8 key transitions, which help guide the company through the stages of blitzscaling, and 9counterintuitive rules, which turn the conventional wisdom of traditional management on its head in order to cope with blitzscaling’s frenzied pace of growth
1. TRANSITION #1: small teams to large teams
2. TRANSITION #2: generalists to specialists
3. TRANSITION #3: Contributors to managers to executives
4. TRANSITION #4: Inspiration to data
5. TRANSITION #5: Single focus to multithreading
6. TRANSITION #6: Pirate to navy
7. TRANSITION #7: Scaling yourself - founder to leader: There are only three ways to scale yourself: delegation, amplification, and just plain making yourself better
RULE #1: Embrace chaos - take action even if you know you still have issues to resolve. Embracing chaos means accepting that uncertainty exists and therefore taking steps to manage it.
RULE #2: Hire Ms. RIGHT NOW, Not Ms. right - you need managers and executives who are “just right” for the current phase of growth
RULE 3: tolerate bad management - classic “good” management and planning presume a certain amount of stability that isn’t always available when you’re blitzscaling.
RULE 4: Launch a product that embarrasses you - if you need to choose between getting to market quickly with an imperfect product or getting to market slowly with a “perfect” product, choose the imperfect product nearly every time. Listen carefully to what your users have to say, but you also need to know when to selectively ignore them
RULE 5: Let fires burn - Prioritizing fires is a function of a combination of different factors. The first is urgency: Which fire is going to damage or kill your business the soonest? The second factor is efficacy: Which fires do you have the ability to extinguish right now, and which will be easier to extinguish later (and vice versa)? The final factor is dependency: Will extinguishing Fire A make it easier to extinguish Fires B and C?
RULE #6: Do things that don't scale -inefficiency is the rule, not the exception. To
prioritize speed, you might invest less in security, write code that isn’t scalable, and wait for things to start breaking before you build QA tools and processes
RULE #7: Ignore your customer Provide whatever customer service you can as long as it doesn’t slow you down…and that may mean no service.
RULE 8: Raise too much money - Excess cash allows you to better account for the unforeseeable—and the only thing that’s foreseeable about blitzscaling is that you will at some point encounter the unforeseeable. Only spend money to fix things that are on the critical path to reach the next phase of scale; everything else can wait.
RULE #9: Evolve your culture - 2 key levers of deliberate cultural transmission are communications and people management.
Even established companies can blitzscale, although there are inherent disadvantages based on the nature of big corporates.
Defending against Blitzscaling
OPTION #1: beat them - continue to play your traditional game.
OPTION #2: join them
OPTION #3: avoid them - cede the current market to blitzscalers and use your current assets to migrate to a new, less vulnerable market.
What all of us need to realize is that Speed and uncertainty are the new stability.
Be an infinite learner, be a first responder and be a source of stability.
Conclusion
This is a very detailed piece of work. Unfortunately, it focuses on the tech world - Silicon Valley in particular. Although the authors argue that blitzscaling can apply to other industries, its not clear how it would. And its also not clear how it would work in other countries without the Silicon Valley ecosystem.
The book also suffers, in a sense, from the constant refernce to Google, Amazon, Facebook and Apple (as well as other know companies like Air bnb and Zynga). It begs the question(s): how many other companies try blitzscaling and go bust? Is it actually worth it? What other factors influenced the hypergrowth of Facebook etc.?
No answers are provided or even proffered.
Overall, this book is likely a great read for entrepreneurs but take the advice with a pinch of salt - this stuff may not work for you.
Well written with lots of anecdotes forged from both personal experience and obvious friendships with some of the most powerful figures in Silicon Valley, Blitzscaling goes into incredible detail about how to achieve scale in the tech business and what could work in other industries too.
Key Takeaways
PART I: WHAT IS BLITZSCALING?
Blitzscaling is both the general framework and the specific techniques that allow companies to achieve massive scale at incredible speed. When you blitzscale, you make decisions and commit to them even though your confidence level is substantially lower than 100%. You accept the risk of making the wrong decision and willingly pay the cost of significant operating inefficiencies in exchange for the ability to move faster. These risks and costs are acceptable because the risk and cost of being too slow is even greater.
Blitzscaling requires more than just courage and skill. It also requires an environment that is willing to finance intelligent risks with both financial capital and human capital, the essential ingredients.
Growth alone is not blitzscaling; blitzscaling is prioritizing speed over efficiency in the face of uncertainty.
Classic start-up growth prioritizes efficiency in the face of uncertainty.
Classic scale-up growth focuses on growing efficiently once the company has achieved certainty about the environment.
Fastscaling means that you’re willing to sacrifice efficiency to increase your growth rate. However, because fastscaling takes place in an environment of certainty, the costs are well understood and predictable.
Blitzscaling means that you’re willing to sacrifice efficiency for speed, but without waiting to achieve certainty on whether the sacrifice will pay off.
The sequence that companies like Google and Facebook have gone through begins with classic start-up growth while establishing product/market fit, then shifts into blitzscaling to achieve critical mass and/or market dominance, then relaxes to fastscaling as the business matures and finally downshifts to classic scale-up growth when the company is an industry leader.
The 3 basics of Blitzscaling
1. It is an offensive and a defensive strategy
2. It thrives on positive feedback loops in that the company that grows to scale first reaps significant competitive advantage
3. It comes with massive risks.
The 5 stages of Blitzscaling
Stage 1 (Family) 1–9 employees
Stage 2 (Tribe) 10s of employees
Stage 3 (Village) 100s of employees
Stage 4 (City) 1000s of employees
Stage 5 (Nation) 10000s of employees.
3 key techniques of Blitzscaling
1. BUSINESS MODEL INNOVATION- design an innovative business model that can truly grow. Technology is no longer as strong a differentiator, while figuring out the right combinations of services to bring together into a breakthrough product has become a major differentiator
2. STRATEGY INNOVATION - know what you plan to do and also what you plan NOT to do.
3. MANAGEMENT INNOVATION - a company’s business model describes how it generates financial returns by producing, selling, and supporting its products.
PART II: BUSINESS MODEL INNOVATION
Most great business models have certain characteristics in common. If you want to find your best business model, you should try to design one that maximizes 4 key growth factors and minimizes 2 key growth limiters.
- growth factor #1: market size -a big market has both a large number of potential customers and a variety of efficient channels for reaching those customers. If a company can’t achieve “venture scale” (generally, a market of at least $1 billion in annual sales), then most VCs won’t invest.
When evaluating market size, account for how lower costs and product improvements can expand markets by appealing to new customers, in addition to seizing market share from existing players.
- growth factor #2: distribution - distribution techniques fall into two general categories: leveraging existing networks and virality.
- growth factor #3: high gross margins - the higher the gross margin, the more valuable each dollar of sales is to the company because it means that for each dollar of sales, the company has more cash available to fund growth and expansion. Also, high-gross-margin businesses are attractive to investors, who will often pay a premium for their cash-generating power. Most of a company’s operational challenges scale based on revenues or unit sales volume, not gross margin.
- growth factor #4: network effects - sustaining that growth long enough to build a massively valuable and lasting franchise. A product or service is subject to positive network effects when increased usage by any user increases the value of the product or service for other users.
Network effects generate a positive feedback loop that results in superlinear growth and value creation. This superlinear effect makes it very difficult for any node in the network to switch from an incumbent to an alternative (“customer lock-in”), since it is almost impossible for any new entrant to match the value of plugging into the existing network.
Direct Network Effects: increases in usage lead to direct increases in value
Indirect Network Effects: increases in usage encourage consumption of complementary goods, which increases the value of the original product.
two-Sided Network Effects: Increases in usage by one set of users increases the value to a different set of complementary users, and vice versa
Local Network Effects: Increases in usage by a small subset of users increases the value for a connected user
Compatibility and Standards: The use of one technology product encourages the use of compatible products.
- growth limiter #1: lack of product/market fit
- growth limiter #2: operational scalability
Proven Business Models Patterns
1. Bits rather than atoms - bits-based businesses have a much easier time serving a global market, which in turn makes it easier to achieve a large market size.
2. Platforms - if a platform achieves scale and becomes the de facto standard for its industry.
3. Free or freemium - without third-party revenue, the problem with offering your product to users for free is that you can’t offset your lack of sales by “making it up in volume.”
4. Marketplaces - often tap into two-sided network effects.
5. Subscriptions - subscription Internet services have been successful because the sales and delivery model provides a larger market size and better distribution than traditional packaged software.
6. Digital good - digital goods tend to have nearly 100 percent gross margins.
7. Feeds - eg Facebook's news feeds
Underlying the proven patterns of business model innovation are larger principles that can help refine those patterns or even create new ones.
- Automation - computers are almost always faster, cheaper, and more reliable than human beings.
- Adaptation not optimization - practice continuous improvement
- The contrarian principle - "Brilliant thinking is rare, but courage is in even shorter supply than genius" (Peter Thiel). if your company is pursuing an opportunity that conventional wisdom ignores or disdains, you will probably have the time you need to refine your business model innovation into a well-oiled machine
PART III: STRATEGY INNOVATION
A few factors if you are wondering whether the time is right for your company to blitzscale:
1. A big new opportunity - one where the market size and gross margins intersect to create enormous potential value, and there isn’t a dominant market leader or oligopoly.
2. First scaler advantage - the most frequent offensive reason for blitzscaling is to achieve a critical mass that confers a lasting competitive advantage.
3. Learning curve - be the first to climb a steep learning curve.
4. Competition - the most common driver of blitzscaling is the threat of competition. The more intense the competition, the faster you should try to move.
5. Good times, bad times - you can successfully blitzscale in both good times, and bad times, though market conditions can and should affect your strategy. If your market stops growing or reaches its upper limit, you should stop blitzscaling.
The best time to choose not to blitzscale is when you’re pursuing a relatively low-margin business model that investors are unwilling to fund at all, unwilling to fund at scale, or unwilling to fund quickly—like, say, a fine-dining restaurant
PART IV: MANAGEMENT INNOVATION
8 key transitions, which help guide the company through the stages of blitzscaling, and 9counterintuitive rules, which turn the conventional wisdom of traditional management on its head in order to cope with blitzscaling’s frenzied pace of growth
1. TRANSITION #1: small teams to large teams
2. TRANSITION #2: generalists to specialists
3. TRANSITION #3: Contributors to managers to executives
4. TRANSITION #4: Inspiration to data
5. TRANSITION #5: Single focus to multithreading
6. TRANSITION #6: Pirate to navy
7. TRANSITION #7: Scaling yourself - founder to leader: There are only three ways to scale yourself: delegation, amplification, and just plain making yourself better
RULE #1: Embrace chaos - take action even if you know you still have issues to resolve. Embracing chaos means accepting that uncertainty exists and therefore taking steps to manage it.
RULE #2: Hire Ms. RIGHT NOW, Not Ms. right - you need managers and executives who are “just right” for the current phase of growth
RULE 3: tolerate bad management - classic “good” management and planning presume a certain amount of stability that isn’t always available when you’re blitzscaling.
RULE 4: Launch a product that embarrasses you - if you need to choose between getting to market quickly with an imperfect product or getting to market slowly with a “perfect” product, choose the imperfect product nearly every time. Listen carefully to what your users have to say, but you also need to know when to selectively ignore them
RULE 5: Let fires burn - Prioritizing fires is a function of a combination of different factors. The first is urgency: Which fire is going to damage or kill your business the soonest? The second factor is efficacy: Which fires do you have the ability to extinguish right now, and which will be easier to extinguish later (and vice versa)? The final factor is dependency: Will extinguishing Fire A make it easier to extinguish Fires B and C?
RULE #6: Do things that don't scale -inefficiency is the rule, not the exception. To
prioritize speed, you might invest less in security, write code that isn’t scalable, and wait for things to start breaking before you build QA tools and processes
RULE #7: Ignore your customer Provide whatever customer service you can as long as it doesn’t slow you down…and that may mean no service.
RULE 8: Raise too much money - Excess cash allows you to better account for the unforeseeable—and the only thing that’s foreseeable about blitzscaling is that you will at some point encounter the unforeseeable. Only spend money to fix things that are on the critical path to reach the next phase of scale; everything else can wait.
RULE #9: Evolve your culture - 2 key levers of deliberate cultural transmission are communications and people management.
Even established companies can blitzscale, although there are inherent disadvantages based on the nature of big corporates.
Defending against Blitzscaling
OPTION #1: beat them - continue to play your traditional game.
OPTION #2: join them
OPTION #3: avoid them - cede the current market to blitzscalers and use your current assets to migrate to a new, less vulnerable market.
What all of us need to realize is that Speed and uncertainty are the new stability.
Be an infinite learner, be a first responder and be a source of stability.
Conclusion
This is a very detailed piece of work. Unfortunately, it focuses on the tech world - Silicon Valley in particular. Although the authors argue that blitzscaling can apply to other industries, its not clear how it would. And its also not clear how it would work in other countries without the Silicon Valley ecosystem.
The book also suffers, in a sense, from the constant refernce to Google, Amazon, Facebook and Apple (as well as other know companies like Air bnb and Zynga). It begs the question(s): how many other companies try blitzscaling and go bust? Is it actually worth it? What other factors influenced the hypergrowth of Facebook etc.?
No answers are provided or even proffered.
Overall, this book is likely a great read for entrepreneurs but take the advice with a pinch of salt - this stuff may not work for you.
April 25, 2019
Read this for work. Difficult to reconcile the recommendations I received with my personal experience with it: some of the smartest, most talented people I've ever met advised me to read this, as they rate it highly.
In parts it was insightful, but in other parts it was intolerably bromidic and superficial. Like, dazzling in its superficiality. And as is the fashion with these sorts of books, the author is given a free pass to make sweeping statements unchecked, without any sort of references whatsoever. Through Blitzscaling, we learn, M-Pesa boosted economic growth in Africa and empowered women there too. That's great. I would love to examine this claim more carefully, but I can't, because there is no reference and if you google "M-Pesa Blitzscaling" you'll be returned right back to this book. You'll be immobilised by similar claims at least 50 times reading this book. I guarantee it. It gets annoying and I don't think accessibility suffices as an excuse.
Beyond the sometimes risible analysis, and the nauseating extrapolation of Blitzscaling as being an instrument for human progress, I did find the explanations of network effects very useful. Especially as it helps to explain why VCs are willing to pour money into start ups that grow quickly without making money.
My recommendation: I wouldn't read past the strategy innovation chapter. This could've been an incredible essay, or series of blog posts. Instead it's a mass frustration with some informative bits. And that's pretty much it.
In parts it was insightful, but in other parts it was intolerably bromidic and superficial. Like, dazzling in its superficiality. And as is the fashion with these sorts of books, the author is given a free pass to make sweeping statements unchecked, without any sort of references whatsoever. Through Blitzscaling, we learn, M-Pesa boosted economic growth in Africa and empowered women there too. That's great. I would love to examine this claim more carefully, but I can't, because there is no reference and if you google "M-Pesa Blitzscaling" you'll be returned right back to this book. You'll be immobilised by similar claims at least 50 times reading this book. I guarantee it. It gets annoying and I don't think accessibility suffices as an excuse.
Beyond the sometimes risible analysis, and the nauseating extrapolation of Blitzscaling as being an instrument for human progress, I did find the explanations of network effects very useful. Especially as it helps to explain why VCs are willing to pour money into start ups that grow quickly without making money.
My recommendation: I wouldn't read past the strategy innovation chapter. This could've been an incredible essay, or series of blog posts. Instead it's a mass frustration with some informative bits. And that's pretty much it.
April 22, 2024
it was ok just kinda wished it go to the point quicker
February 13, 2019
5 stars for the main idea, 4 stars for the examples and case studies that were on the shallow side, 3 stars for the last two hours of the book (I listened as an audiobook) which basically said that China is big and that companies that blitzscale should keep ethics in mind, without any practical guidance or examples.
I’m guessing that a Blinkist version of this book would work well.
I’m guessing that a Blinkist version of this book would work well.
November 10, 2018
يتحدث الكتاب عن آلية تكبير المشاريع الناشئة. فيبدأ بذكر أهمية التكبير وأنه ليس برفاهية، وإنما هو أساسي لضمان بقاء واستمرار المشروع الريادي. ثم يعطي آلية القيام بالتكبير واستراتيجياته وخطواته.
ينصح بالكتاب لأي شخص بدأ بمشروعه الناشئ
ينصح بالكتاب لأي شخص بدأ بمشروعه الناشئ
August 26, 2023
blitzscale me daddy
October 19, 2018
Объяснение концепции, которую сам же Рид Хоффман и придумал - блитцскейлинг. Не так много инсайтов, проблема - книга написана по материалам оффлайн курса и слишком много достаточно базовых и повторяющихся вещей. Из интересного - объяснение в чем смысл блитцскейлинга, его особенности, фазы, риски, отличие от просто быстрого роста/масштабирования.
January 22, 2019
The biggest problem with this book for me is that the author treats 'scalabilty' as an independent variable that can be controlled. While in reality it is dependent on the variables that are largely not in a firms control.
Most of the examples used in the book relates to the internet firms that pioneered the space and are different from traditional firms. For most of the examples cited, like Airbnb or Uber, there is practically no entry barrier to enter new markets expect for investment required. This is well understood by the silicon valley investment circles and hence they are prioritizing growth for efficiency. Blitzscaling is possible for certain market conditions in the internet economy where the entry barriers are practically zero. This simple concept has been hackneyed and generalized without giving importance to the conditions under which it is applicable.
However, the book gives a lot of insights into decision making and leadership of some of the key SV firms. Hoffman's experience in building a lot of successful companies is reflected in the chapter where he explains the various stages of scaling and what skills are required in those particular stages. Despite its flaws in rationalizing 'scaling' the book provides massive insights into functioning of silicon valley firms.
Most of the examples used in the book relates to the internet firms that pioneered the space and are different from traditional firms. For most of the examples cited, like Airbnb or Uber, there is practically no entry barrier to enter new markets expect for investment required. This is well understood by the silicon valley investment circles and hence they are prioritizing growth for efficiency. Blitzscaling is possible for certain market conditions in the internet economy where the entry barriers are practically zero. This simple concept has been hackneyed and generalized without giving importance to the conditions under which it is applicable.
However, the book gives a lot of insights into decision making and leadership of some of the key SV firms. Hoffman's experience in building a lot of successful companies is reflected in the chapter where he explains the various stages of scaling and what skills are required in those particular stages. Despite its flaws in rationalizing 'scaling' the book provides massive insights into functioning of silicon valley firms.
December 6, 2019
This book is a must read for people in any role in a fast-growing startup. It looks like Reid spent a year in our company and wrote the book. It has really helped me understand the changes the company, my role and myself were going through.
October 26, 2018
I've started reading this one thanks to some recommendations, but I was more than skeptical - my initial impression was that author tries to "sell" me some wonderful scaling framework, silver-bullet of rapid growth, hype-generating bullshit peptalk conveniently split into few non-specific rules. This impression lasted until 15%-20% of the book. Fortunately, I've prevailed & read further ...
... and now I can confirm that there's actually a lot of valuable content in these pages. A lot of good points regarding various profiles of people (& where they fit), archetypes of culture, conditions when rapid scaling may be beneficial (or not), roles of managers & executives, importance of network effects, etc. Book is in fact very practical & it clearly feels that it was written by someone who has got the experience "in the trenches".
In the end, maybe it's not a "super-clear, undisputed 5 stars", but surely not less than 4.5. Recommended read.
... and now I can confirm that there's actually a lot of valuable content in these pages. A lot of good points regarding various profiles of people (& where they fit), archetypes of culture, conditions when rapid scaling may be beneficial (or not), roles of managers & executives, importance of network effects, etc. Book is in fact very practical & it clearly feels that it was written by someone who has got the experience "in the trenches".
In the end, maybe it's not a "super-clear, undisputed 5 stars", but surely not less than 4.5. Recommended read.
November 8, 2018
If you are a company that needs to win your market to win--like a social network where the key to survival is having tons of people on your platform or a large volume producer that needs a ton of clients to reach profit--then this is an amazing book for you. He does a great job clarifying that everyone shouldn't be in blitz-growth mode, and that even those who do it shouldn't stay in that mode forever. It's not efficient growth at all. But this might be the first great book on how to actually drive crazy fast growth and win a market in one massive blitz.
Very well written. Not for everyone, though.
Very well written. Not for everyone, though.
July 4, 2019
Blitzscaling is a book that I believe every entrepreneur should read today. It observes how speed and uncertainty are the new stability in the era of new emerging technologies and that those who act on that and accept it can scale their business in a faster, efficient and promising way. Good read, and amazing case studies and tips on how to implement it in your own business.
December 13, 2018
Blitzscaling is to achieve a critical mass that confers a lasting competitive advantage.
If taking on additional cost and uncertainty doesn't actually confer an advantage, it's better to follow the traditional rules of business (at least for the time being) so that when blitzscaling does become appropriate, your organization can be efficient, well maintained, and more ready to scale.
Because blitzscaling is - by definition - an inefficient use of capital, it only makes sense when speed and momentum are important.
Marines are start-up people who are used to dealing with chaos and improvising solutions on the spot. Army soldiers are scale-up people, who know how to rapidly seize and secure territory once your forces make it off the beach. And police offers are stability people, whose job is to sustain rather than disrupt. As you blitzscale, you may need to find new beaches for your marines to take rather than ask them to help patrol the existing ones.
Our friend John Lilly like to distinguish between "genius-driven design" (e.g. Apple) and "data-driven design" (e.g. Google). Both approaches have their strengths and weaknesses. Data-driven design is great at optimizing products with incremental changes, but it could steer you to the top of a local hill rather than the highest peak. Genius-driven design may be the only way to build a revolutionary product, but it usually needs to be supplemented with data-driven refinement.
Startups in the early stages of blitzscaling are generally single-product companies that focus on doing one thing extremely well. but to keep the company growing in the later stages, scale-ups need to manage multiple product lines or even business units.
Dropbox's Drew Houston described how he tries to learn from fellow entrepreneurs who are on the same journey: Talk with other entrepreneurs. Not just famous entrepreneurs, but people who are one year ahead, two years ahead and 5 years ahead. you learn very different and important things from those kinds of people. It really helps to have a sense of the longer-term arc, because the game changes quietly from phase to phase.
Most cultures begin to form organically. As we've discussed previously, the founders of the organization have a major influence on the culture, simply because of who they are. If a founder believes that certain beliefs and practices are fundamental keys to winning, those beliefs and practices tend to be transmitted to the people who work closely with him or her. This might occur via filtering during the hiring process, as a result of working closely together, or both.
By the time an organization reaches the Village stag of blitzscaling (at least one hundred employees), the mesh of person-to-person interaction is insufficient, especially when culture needs to be synchronized across multiple offices. Drew Houston makes sure that all Dropbox employees are aware that they need to help re-create the culture. "We tell people, 'You might have just joined last week, but sooner or later, you'll be an old-school Dropboxer too. So remember the things you like about this place now, because it'll be your responsibility to make sure those things stick around.'"
You while early employees often feat that deliberate cultural development will bring bureaucracy, as Reed argues, culture is actually a substitute for bureaucracy and rules. The stronger you make your culture, the less you'll have to bind people's behavior with rigid directives.
"Culture is about repeating, over and over again, the things that really matter for your company."
At Amazon, Jeff Bezos famously bans PowerPoint decks and insists on written memos, which are read in silence at the beginning of each meeting. This memo policy is one of the ways that Amazon encourages a culture of truth telling. Memos have to be specific and comprehensive, and those who read the memos have to respond in kind rather than simply sit through some broad bullet points on a PowerPoint deck and nod vague agreement. Bezos believes that memos encourage smarter questions and deeper thinking. Plus, because they're self-container (rather than requiring a person to present a deck), they are more easily distributed and consumed by a wider population within Amazon.
Eric Schmidt - "The people that you hire make your culture, we'd hire people who were special in some way. You don't hire generic people - you hire people who have had stress and achievement."
If taking on additional cost and uncertainty doesn't actually confer an advantage, it's better to follow the traditional rules of business (at least for the time being) so that when blitzscaling does become appropriate, your organization can be efficient, well maintained, and more ready to scale.
Because blitzscaling is - by definition - an inefficient use of capital, it only makes sense when speed and momentum are important.
Marines are start-up people who are used to dealing with chaos and improvising solutions on the spot. Army soldiers are scale-up people, who know how to rapidly seize and secure territory once your forces make it off the beach. And police offers are stability people, whose job is to sustain rather than disrupt. As you blitzscale, you may need to find new beaches for your marines to take rather than ask them to help patrol the existing ones.
Our friend John Lilly like to distinguish between "genius-driven design" (e.g. Apple) and "data-driven design" (e.g. Google). Both approaches have their strengths and weaknesses. Data-driven design is great at optimizing products with incremental changes, but it could steer you to the top of a local hill rather than the highest peak. Genius-driven design may be the only way to build a revolutionary product, but it usually needs to be supplemented with data-driven refinement.
Startups in the early stages of blitzscaling are generally single-product companies that focus on doing one thing extremely well. but to keep the company growing in the later stages, scale-ups need to manage multiple product lines or even business units.
Dropbox's Drew Houston described how he tries to learn from fellow entrepreneurs who are on the same journey: Talk with other entrepreneurs. Not just famous entrepreneurs, but people who are one year ahead, two years ahead and 5 years ahead. you learn very different and important things from those kinds of people. It really helps to have a sense of the longer-term arc, because the game changes quietly from phase to phase.
Most cultures begin to form organically. As we've discussed previously, the founders of the organization have a major influence on the culture, simply because of who they are. If a founder believes that certain beliefs and practices are fundamental keys to winning, those beliefs and practices tend to be transmitted to the people who work closely with him or her. This might occur via filtering during the hiring process, as a result of working closely together, or both.
By the time an organization reaches the Village stag of blitzscaling (at least one hundred employees), the mesh of person-to-person interaction is insufficient, especially when culture needs to be synchronized across multiple offices. Drew Houston makes sure that all Dropbox employees are aware that they need to help re-create the culture. "We tell people, 'You might have just joined last week, but sooner or later, you'll be an old-school Dropboxer too. So remember the things you like about this place now, because it'll be your responsibility to make sure those things stick around.'"
You while early employees often feat that deliberate cultural development will bring bureaucracy, as Reed argues, culture is actually a substitute for bureaucracy and rules. The stronger you make your culture, the less you'll have to bind people's behavior with rigid directives.
"Culture is about repeating, over and over again, the things that really matter for your company."
At Amazon, Jeff Bezos famously bans PowerPoint decks and insists on written memos, which are read in silence at the beginning of each meeting. This memo policy is one of the ways that Amazon encourages a culture of truth telling. Memos have to be specific and comprehensive, and those who read the memos have to respond in kind rather than simply sit through some broad bullet points on a PowerPoint deck and nod vague agreement. Bezos believes that memos encourage smarter questions and deeper thinking. Plus, because they're self-container (rather than requiring a person to present a deck), they are more easily distributed and consumed by a wider population within Amazon.
Eric Schmidt - "The people that you hire make your culture, we'd hire people who were special in some way. You don't hire generic people - you hire people who have had stress and achievement."
August 27, 2022
Terrible as generic advice to employees and companies.
Really valuable for an extremely niche type of startup. I think people need to be hit in the head with a paddle that says “Reid did this with a SOCIAL MEDIA company” it works best with an extremely low marginal cost business.
Personally I think there’s a big problem with companies that should not use a strategy like this (scooter companies, ridesharing, grocery delivery, one click checkout) that take RHs advice as gospel. But I think that has to do more with systematic idiocracy around VC and their incessant need to “grow” at the expense of sustainability and actually building a functioning company. Capital will be deployed to the best opportunities available, not necessarily the best opportunities generally. IMO we are seeing (circa 2021-2022) that these companies unit economics don’t really work without large subsidies. But the machine trundles on.
Really valuable for an extremely niche type of startup. I think people need to be hit in the head with a paddle that says “Reid did this with a SOCIAL MEDIA company” it works best with an extremely low marginal cost business.
Personally I think there’s a big problem with companies that should not use a strategy like this (scooter companies, ridesharing, grocery delivery, one click checkout) that take RHs advice as gospel. But I think that has to do more with systematic idiocracy around VC and their incessant need to “grow” at the expense of sustainability and actually building a functioning company. Capital will be deployed to the best opportunities available, not necessarily the best opportunities generally. IMO we are seeing (circa 2021-2022) that these companies unit economics don’t really work without large subsidies. But the machine trundles on.
December 22, 2020
This book aims to be a text book of sorts for running a modern tech business. Blitzscaling is not an original framework or a specific technique like the 'Lean Start-up' or 'Hooked' but an examination of various aspects of growing a tech business under an ambiguous name. Most of the actual content is examples from Reid's podcasts, requoting of famous blogs or other well known material already in the public domain. Nothing original or ground breaking here. Nothing factually incorrect or oversimplified either. As somebody who's worked in tech for years now, I snoozed through the early chapters but enjoyed the last few chapters on people scaling.
February 17, 2019
My overall feeling is that I've learned a lot from this book. Although, I can't point specifically what.
In the end, most blitzscalling challenges and tools are mostly useful for startup in general. Specially those with a good amount of funding. Hoffman ends up focusing a lot on three pillars : speed, size and people. Which makes lots of sense. And how they will end up building and breaking your company along the way. In a, hopefully, virtuous cycle.
In the end he lost me when started incentivising an unhealthy work pace and also selling that blitzscalling will kinda save the world.
In the end, most blitzscalling challenges and tools are mostly useful for startup in general. Specially those with a good amount of funding. Hoffman ends up focusing a lot on three pillars : speed, size and people. Which makes lots of sense. And how they will end up building and breaking your company along the way. In a, hopefully, virtuous cycle.
In the end he lost me when started incentivising an unhealthy work pace and also selling that blitzscalling will kinda save the world.
November 20, 2018
Clearly my best read of 2018. Will recommend this to any entrepreneur.
October 9, 2023
This is one of the dumbest and most evil things I've ever read.
November 4, 2020
2 out of 5 stars means it's ok.
The book starts in an interesting way segmenting approaches and showing where the blitzscaling approach approach lies. Then it's ok for a while. Then the meat grinder starts working throwing various topics, even paragraphs into one big thing. The magic of "7 rules for" and "5 disadvantages" does not help to convey the message because sometimes it's hard to tell, what the message is.
The author mentions that he delivers a class about blitzscaling in one of universities. Additionally he provides a great portfolio of projects he was part of. Unfortunately, this systematic approach is not reflected here, making it a selection of short stories, paragraphs and groupings rather than a whole book.
The book starts in an interesting way segmenting approaches and showing where the blitzscaling approach approach lies. Then it's ok for a while. Then the meat grinder starts working throwing various topics, even paragraphs into one big thing. The magic of "7 rules for" and "5 disadvantages" does not help to convey the message because sometimes it's hard to tell, what the message is.
The author mentions that he delivers a class about blitzscaling in one of universities. Additionally he provides a great portfolio of projects he was part of. Unfortunately, this systematic approach is not reflected here, making it a selection of short stories, paragraphs and groupings rather than a whole book.
November 4, 2021
Very informative book for someone who deeply questions how hiper growth companies achieve and survive such tumultuous rises.
The only defect is that as with many Silicon Valley and now Crypto wisdom, there can be a bit of success blindness in the stories. Which makes authors eager to point out success causes, relatable to them, hyping them a bit more than the credit they might deserve.
The only defect is that as with many Silicon Valley and now Crypto wisdom, there can be a bit of success blindness in the stories. Which makes authors eager to point out success causes, relatable to them, hyping them a bit more than the credit they might deserve.
May 10, 2020
In some ways a deeper dive into some of the ideas in Zero to One. Drier, longer, and overall harder to get through than Zero to One, but still deserving of four stars because of how much practical content is in here.
February 16, 2021
Had higher hopes from the book given it's written by Reid Hoffman but this turned out to be just okay.
The only thing this book has helped me is in changing the mindset on what it takes to blitzscale a company.
To effectively blitzscale, you have to move from efficient data driven decision making thought process to inefficient intuition driven risky informed bets.
The only thing this book has helped me is in changing the mindset on what it takes to blitzscale a company.
To effectively blitzscale, you have to move from efficient data driven decision making thought process to inefficient intuition driven risky informed bets.
August 11, 2019
“blitzscaling is prioritizing speed over efficiency in the face of uncertainty.” Based on recommendations I had high expectations for this book and its not a bad book but I was not very impressed as I've encountered similar recommendations already in several other books. I saw many similar topics with Platform Revolution/Lean Startup and company examples were mainly based on LinkedIn, Paypal, Netflix, Airbnb, Tencent (Weechat), Amazon and Apple which are already well covered in their respective books. The strategic and operational examples and recommendations are generally sound but common sense for someone already familiar with the concepts. Some of the statements could also be challenged, for example cloud hosting with the major vendors is not the only option and for most big organizations post rapid scaling could create their private cloud with more optimal cost. Generalizing some concept outside its natural scope is always risky business and the part about blitzscaling outside business world is relatively weak. As a good takeaway from this book I will be looking forward to read more about Jack Ma/Tencent and Airbnb.
“Tencent had partnered with leading mobile carriers like China Mobile to receive 40 percent of the SMS charges that QQ users racked up when they sent messages to mobile phones. A new service could hurt Tencent’s financial bottom line and at the same time risk its relationships with some of China’s most powerful companies. It was the sort of decision that publicly traded, ten-thousand-person companies typically refer to a committee for further study. But Ma wasn’t a typical corporate executive. That very night, he gave Zhang the go-ahead to pursue the idea. Zhang put together a ten-person team, including seven engineers, to build and launch the new product. In just two months, Zhang’s small team had built a mobile-first social messaging network with a clean, minimalistic design that was the polar opposite of QQ. Ma named the service Weixin, which means “micromessage” in Mandarin. Outside of China, the service became known as WeChat. What came next was staggering. Just sixteen months after Zhang’s fateful late-night message to Ma, WeChat celebrated its one hundred millionth user. Six months after that, it had grown to two hundred million users. Four months after that, it had grown to three hundred million users. Pony Ma’s late-night bet paid off handsomely. Tencent reported 2016 revenues of $ 22 billion, up 48 percent from the previous year, and up nearly 700 percent since 2010, the year before WeChat’s launch. By early 2018, Tencent reached a market capitalization of over $ 500 billion, making it one of the world’s most valuable companies, and WeChat was one of the most widely and intensively used services in the world. Fast Company called WeChat “China’s app for everything,” and the Financial Times reported that more than half of its users spend over ninety minutes a day using the app. To put WeChat in an American context, it’s as if one single service combined the functions of Facebook, WhatsApp, Facebook Messenger, Venmo, Grubhub, Amazon, Uber, Apple Pay, Gmail, and even Slack into a single megaservice. You can use WeChat to do run-of-the-mill things like texting and calling people, participating in social media, and reading articles, but you can also book a taxi, buy movie tickets, make doctors’ appointments, send money to friends, play games, pay your rent, order dinner for the night, plus so much more. All from a single app on your smartphone.”
“But prioritizing speed over efficiency—even in the face of uncertainty—is especially important when your business model depends on having lots of members and getting feedback from them. If you get in early and start getting that feedback and your competitors don’t, then you’re on the path to success. In any business where scale really matters, getting in early and doing it fast can make the difference.”
“The scaling curve applies to every blitzscaler, regardless of industry or geography. The same multiple S-curve graph that describes Facebook or Apple also describes Tencent, which launched with QQ, then added a second curve for WeChat after QQ reached maturity in 2010. Just when you’ve finished blitzscaling one business line, you need to blitzscale the next to maintain your company’s upward trajectory. And as blitzscaling continues to spread, established companies with mature business lines should consider turning to intrapreneurs to blitzscale new business units.”
“Tencent had partnered with leading mobile carriers like China Mobile to receive 40 percent of the SMS charges that QQ users racked up when they sent messages to mobile phones. A new service could hurt Tencent’s financial bottom line and at the same time risk its relationships with some of China’s most powerful companies. It was the sort of decision that publicly traded, ten-thousand-person companies typically refer to a committee for further study. But Ma wasn’t a typical corporate executive. That very night, he gave Zhang the go-ahead to pursue the idea. Zhang put together a ten-person team, including seven engineers, to build and launch the new product. In just two months, Zhang’s small team had built a mobile-first social messaging network with a clean, minimalistic design that was the polar opposite of QQ. Ma named the service Weixin, which means “micromessage” in Mandarin. Outside of China, the service became known as WeChat. What came next was staggering. Just sixteen months after Zhang’s fateful late-night message to Ma, WeChat celebrated its one hundred millionth user. Six months after that, it had grown to two hundred million users. Four months after that, it had grown to three hundred million users. Pony Ma’s late-night bet paid off handsomely. Tencent reported 2016 revenues of $ 22 billion, up 48 percent from the previous year, and up nearly 700 percent since 2010, the year before WeChat’s launch. By early 2018, Tencent reached a market capitalization of over $ 500 billion, making it one of the world’s most valuable companies, and WeChat was one of the most widely and intensively used services in the world. Fast Company called WeChat “China’s app for everything,” and the Financial Times reported that more than half of its users spend over ninety minutes a day using the app. To put WeChat in an American context, it’s as if one single service combined the functions of Facebook, WhatsApp, Facebook Messenger, Venmo, Grubhub, Amazon, Uber, Apple Pay, Gmail, and even Slack into a single megaservice. You can use WeChat to do run-of-the-mill things like texting and calling people, participating in social media, and reading articles, but you can also book a taxi, buy movie tickets, make doctors’ appointments, send money to friends, play games, pay your rent, order dinner for the night, plus so much more. All from a single app on your smartphone.”
“But prioritizing speed over efficiency—even in the face of uncertainty—is especially important when your business model depends on having lots of members and getting feedback from them. If you get in early and start getting that feedback and your competitors don’t, then you’re on the path to success. In any business where scale really matters, getting in early and doing it fast can make the difference.”
“The scaling curve applies to every blitzscaler, regardless of industry or geography. The same multiple S-curve graph that describes Facebook or Apple also describes Tencent, which launched with QQ, then added a second curve for WeChat after QQ reached maturity in 2010. Just when you’ve finished blitzscaling one business line, you need to blitzscale the next to maintain your company’s upward trajectory. And as blitzscaling continues to spread, established companies with mature business lines should consider turning to intrapreneurs to blitzscale new business units.”
June 6, 2020
This book is the fastest MBA of today's times that I could ever do. It clears the "mystic secret" of what the Silicon Valley guys are really doing differently than us. Literally, every page has a big deal of a lesson. But most of all it is the lightening pace (even over efficiency, but not ethics!) that is the need of the hour that's impressed and challenged me.
I look forward to thinking and mulling over this book for months to come, and apply it to my own business. Or hey, shall I be compressing it in a few days now?!
Here are a few extracts that I liked:
- As the world has gone digital, business model innovation has become even more important. So many technologies are available as services, which are on demand and built to be integrated, that technology is no longer as strong a differentiator, while figuring out the right combinations of services to bring together into a breakthrough product has become a major differentiator. Most of today’s successful companies are more like Tesla, which combines a set of technologies that already existed, rather than SpaceX, which had to pioneer new ones.
- “If your playbook is the same as your competitor’s, you are in trouble, because chances are they are just going to run your playbook with a lot more resources!”
- A major mistake made by many start-ups around the world is focusing on the technology, the software, the product, and the design, but neglecting to ever figure out the business. And by “business” we simply mean how the company makes money by acquiring and serving its customers. In contrast, despite the popular “engineers are gods” narrative prevalent in Silicon Valley, the companies and founders we universally hail as geniuses aren’t just technology nerds—they’re almost always business nerds too.
- The key is to combine new technologies with effective distribution to potential customers, a scalable and high-margin revenue model, and an approach that allows you to serve those customers given your probable resource constraints.
All in all, I highly recommend this book to start-up engineers and leaders of giant corporations alike.
I look forward to thinking and mulling over this book for months to come, and apply it to my own business. Or hey, shall I be compressing it in a few days now?!
Here are a few extracts that I liked:
- As the world has gone digital, business model innovation has become even more important. So many technologies are available as services, which are on demand and built to be integrated, that technology is no longer as strong a differentiator, while figuring out the right combinations of services to bring together into a breakthrough product has become a major differentiator. Most of today’s successful companies are more like Tesla, which combines a set of technologies that already existed, rather than SpaceX, which had to pioneer new ones.
- “If your playbook is the same as your competitor’s, you are in trouble, because chances are they are just going to run your playbook with a lot more resources!”
- A major mistake made by many start-ups around the world is focusing on the technology, the software, the product, and the design, but neglecting to ever figure out the business. And by “business” we simply mean how the company makes money by acquiring and serving its customers. In contrast, despite the popular “engineers are gods” narrative prevalent in Silicon Valley, the companies and founders we universally hail as geniuses aren’t just technology nerds—they’re almost always business nerds too.
- The key is to combine new technologies with effective distribution to potential customers, a scalable and high-margin revenue model, and an approach that allows you to serve those customers given your probable resource constraints.
All in all, I highly recommend this book to start-up engineers and leaders of giant corporations alike.
November 29, 2018
Maybe I'm just getting old, but I'm not sure how I feel about these books that try to make a point without any sort of comprehensive study, just some personal anecdotes of the author's. Granted, the author giving the personal anecdotes is one of the biggest success stories out there.
This also seems to apply only to people trying to make their businesses go viral, so it might not be applicable to B2B companies, or local restaurants, etc. To be fair, he addresses this (around halfway through the book), but he then states that most businesses will be online businesses (or already are). While this is true, it would have been handier (and frankly, more honest), to state this at the beginning, or on the dust jacket, so people who pick this book up know who its target market is right away.
All of this isn't to say I don't believe in his message. On the contrary, for some businesses this book is probably essential reading. This may even, at some point, include mine, in which case I should probably re-read it at that point. In the meantime, these are some of the notes I took:
The only time to blitzscale is when you have determined that speed is THE critical strategy to achieve massive outcomes. (This means greater uncertainty)
[EDIT:
8 Transitions in Management Innovation (NOT steps in Blitzscaling, as previously written)]:
1. Small teams to large teams
2. Generalists to Specialists
(Marines, army and police analogy)
3. Contributors to managers to executives
4. Dialogue to Broadcasting
5. Inspiration to Data
6. Single focus to multi-threading
"Freedom just means you have nothing to lose"
7. Pirate to Navy
(If I wanted to compete with myself, what would I do?)
8. Scale yourself (Founder to leader)
Always have a Plan A, Plan B, and Plan Z
Launch a product that embarrasses you (no time for perfection)
This also seems to apply only to people trying to make their businesses go viral, so it might not be applicable to B2B companies, or local restaurants, etc. To be fair, he addresses this (around halfway through the book), but he then states that most businesses will be online businesses (or already are). While this is true, it would have been handier (and frankly, more honest), to state this at the beginning, or on the dust jacket, so people who pick this book up know who its target market is right away.
All of this isn't to say I don't believe in his message. On the contrary, for some businesses this book is probably essential reading. This may even, at some point, include mine, in which case I should probably re-read it at that point. In the meantime, these are some of the notes I took:
The only time to blitzscale is when you have determined that speed is THE critical strategy to achieve massive outcomes. (This means greater uncertainty)
[EDIT:
8 Transitions in Management Innovation (NOT steps in Blitzscaling, as previously written)]:
1. Small teams to large teams
2. Generalists to Specialists
(Marines, army and police analogy)
3. Contributors to managers to executives
4. Dialogue to Broadcasting
5. Inspiration to Data
6. Single focus to multi-threading
"Freedom just means you have nothing to lose"
7. Pirate to Navy
(If I wanted to compete with myself, what would I do?)
8. Scale yourself (Founder to leader)
Always have a Plan A, Plan B, and Plan Z
Launch a product that embarrasses you (no time for perfection)
January 2, 2021
The core premise of Blitzscaling is growing quickly is the best defense against takeover. Uncertainty in the midst of growth is more important than efficiency and growth.
What made Blitzscaling a unique book is it lays out the transition from small scale startup to medium to large. In each step, the role required from employees and boss shift. I particularly liked the analogy of Marine (startup that deal with chaos and find solutions on the spot), Army (find a way to scale up and secure the territory), and Police force (people who sustain order rather than expand). Marine and army can talk together. Army and police can talk together. But not marine and police.
Reid Hoffman along with Peter Thiel believes in strategic thinking. "Many companies … still think it’s sufficient to conduct a lot of A/B tests and iterate accordingly. This is an effective tactic but poor strategy, since local optimizations do not necessarily lead to a globally optimal result.".
Other common paths in blitzscalable businesses are:
1. Bits rather than atoms.
2. Platforms (lasting competitive advantage)
3. Free or Freemium
4. Marketplaces
5. Subscription
6. Digital goods (Line stamp)
7. Feeds
He concludes the book with how existing organizations can defend against these blizscalers. That makes this book accessible and interesting read for a wide range of audience from startupers, investors, existing corporatinos who look at Sillicon Valley in a strange eye.
For me as a startuper, it was one star off. Despite its packed advice, he did not dive that deep into his own story of LinkedIn. Most startups fail before product-market fit. That's before this blizscaling is even possible. It'd have been more valuable if he covered the early days of LinkedIn more extensively for startupers.
What made Blitzscaling a unique book is it lays out the transition from small scale startup to medium to large. In each step, the role required from employees and boss shift. I particularly liked the analogy of Marine (startup that deal with chaos and find solutions on the spot), Army (find a way to scale up and secure the territory), and Police force (people who sustain order rather than expand). Marine and army can talk together. Army and police can talk together. But not marine and police.
Reid Hoffman along with Peter Thiel believes in strategic thinking. "Many companies … still think it’s sufficient to conduct a lot of A/B tests and iterate accordingly. This is an effective tactic but poor strategy, since local optimizations do not necessarily lead to a globally optimal result.".
Other common paths in blitzscalable businesses are:
1. Bits rather than atoms.
2. Platforms (lasting competitive advantage)
3. Free or Freemium
4. Marketplaces
5. Subscription
6. Digital goods (Line stamp)
7. Feeds
He concludes the book with how existing organizations can defend against these blizscalers. That makes this book accessible and interesting read for a wide range of audience from startupers, investors, existing corporatinos who look at Sillicon Valley in a strange eye.
For me as a startuper, it was one star off. Despite its packed advice, he did not dive that deep into his own story of LinkedIn. Most startups fail before product-market fit. That's before this blizscaling is even possible. It'd have been more valuable if he covered the early days of LinkedIn more extensively for startupers.
February 23, 2019
This is a valuable book to read for someone interested in joining or understanding a high-growth startup. Hoffman provides concrete examples for the majority of his lessons in the book that are accessible to people who are not as familiar with the tech industry. He provides a compelling argument for the counterintuitive practice of blitzscaling, or prioritizing speed over efficiency in order to survive and achieve massive scale. However, most of his lessons around business innovation and strategy innovation are focused on consumer companies, and far less applicable to enterprise companies. I really enjoyed his lessons around management innovation, and found that his classifications of the five stages of blitzscaling (family, tribe, village, city, and nation) were particularly useful references throughout the book as he explained things to watch out for and account for at each stage of the company. I found the final few chapters of the book to be disappointing. "The broader landscape of blitzscaling" felt behind the times (even less than a year after publication) as he refers to experts like Andrew Ng and Lei Jun to back his claims in areas like machine learning, politics, and China where he has much less personal experience. "Responsible blitzscaling" is an afterthought of a chapter about considering the social implications of the company as you blitzscale. Despite some concerns with parts of the book, I would recommend it as a reference to get a broad understanding of what startups are thinking about today as they scale.
January 6, 2020
2/3 of the book would get 4* and the remaining part only 2*.
Blitzscaling is prioritizing speed over efficiency.
4 key factors to consider for blitzscaling: market size, distribution, gross margin, network effect.
5 stages and managerial changes while scaling: family 1-10 employees, tribe 10+, village 100+, city 1k+, nation 10k+
"When a market is up for grabs, the risk isn't inefficiency - the risk playing it too safe"
"... embrace counterintuitive rules like hiring "good enough" people, launching flawed and imperfect products, letting fires burn, and ignoring angry customers."
"Free has an incredible power that no other pricing does"
"...if your executives can't scale, your business won't scale either"
"Regular emails to all employees are a common best practice [communication]"
"You've got to keep your personal learning curve ahead of the company's growth curve."
"There are only three ways to scale yourself: delegation, amplification, and just plain making yourself better"
"There are no job descriptions for founders. If the role doesn't change, there's something wrong"
"Talk with other entrepreneurs. Not just famous, but people who are one year ahead, two or five years ahead."
"Hiring someone who has been managing a thousand people to run ten-person company is actually counterproductive..."
"Self-regulation can actually delay or preempt government regulation."
Blitzscaling is prioritizing speed over efficiency.
4 key factors to consider for blitzscaling: market size, distribution, gross margin, network effect.
5 stages and managerial changes while scaling: family 1-10 employees, tribe 10+, village 100+, city 1k+, nation 10k+
"When a market is up for grabs, the risk isn't inefficiency - the risk playing it too safe"
"... embrace counterintuitive rules like hiring "good enough" people, launching flawed and imperfect products, letting fires burn, and ignoring angry customers."
"Free has an incredible power that no other pricing does"
"...if your executives can't scale, your business won't scale either"
"Regular emails to all employees are a common best practice [communication]"
"You've got to keep your personal learning curve ahead of the company's growth curve."
"There are only three ways to scale yourself: delegation, amplification, and just plain making yourself better"
"There are no job descriptions for founders. If the role doesn't change, there's something wrong"
"Talk with other entrepreneurs. Not just famous, but people who are one year ahead, two or five years ahead."
"Hiring someone who has been managing a thousand people to run ten-person company is actually counterproductive..."
"Self-regulation can actually delay or preempt government regulation."
July 14, 2020
Nothing truly eye-opening, but an interesting insight into the mentality of Silicon Valley.
The book is mostly pretty vague, offering mostly anecdotes from success stories the author has been involved in, which I think leads to a quite strong survival bias. However, Hoffman and Yeh offer some interesting perspectives on hiring outside executives vs promoting from the inside and having executives that fit the specific stage the company is in (family/tribe/village/city/nation). This is also related to an interesting discussion about generalists vs specialists. The authors also offer interesting ideas of how to the importance of having a balanced "pirate" mentality in the earlier stages, and how to responsibly transition into a "navy" mentality as the company grows.
The book is mostly pretty vague, offering mostly anecdotes from success stories the author has been involved in, which I think leads to a quite strong survival bias. However, Hoffman and Yeh offer some interesting perspectives on hiring outside executives vs promoting from the inside and having executives that fit the specific stage the company is in (family/tribe/village/city/nation). This is also related to an interesting discussion about generalists vs specialists. The authors also offer interesting ideas of how to the importance of having a balanced "pirate" mentality in the earlier stages, and how to responsibly transition into a "navy" mentality as the company grows.
January 11, 2020
This is a quick and entertaining read. Blitzscaling as defined by Reid Hoffman is trying to assemble a rocket ship as you free fall off of a cliff. I especially appreciated that Reid talks about when *NOT* to blitzscale despite how fashionable such approaches are in Silicon Valley, and how to apply blitzscaling as safely as possible.
I've also found "Masters of Scale" -- Reid's podcast --to be an interesting supplement to this book.
I've also found "Masters of Scale" -- Reid's podcast --to be an interesting supplement to this book.
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