Blitzscaling is a book about "The lightning-fast path to build massively valuable companies", which was written by Reid Hoffman (LinkedIn cofounder) and Chris Yeh, forwarded by Bill Gates. Whether your business has ten employees or ten thousand, Blitzscaling is the essential playbook for winning in a world where speed is the competitive advantage that matters most. This book talks about "What is Blitzscaling", Business Model innovation, Strategy innovation, management innovation, broader landscape of Blitzscaling, and Responsible Blitzscaling.
Blitzscaling is a strategy and set of techniques for driving and managing extremely rapid growth that prioritize speed over efficiency in an environment of uncertainty. Put another way, it's an accelerant that allows your company to grow at a furious pace that knocks the competition out of the water.
Whether you are a founder, a manager, a potential employee, or an investor, we believe that understanding blitzscaling will allow you to make better decisions in a world where speed is the critical competitive advantage.
The term "blitzscaling" derives from the twentieth-century usage of "blitz" as a way of describing a sudden, all-out effort. The first usage of blitz in this way was to describe the "blitzkrieg" strategy that General Heinz Guderian devised for the initial military campaigns of Nazi Germany in world war II.
Blitzscaling is what we call both the general framework and the specific techniques that allow companies to achieve massive scale at incredible speed.
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 for the sake of increasing your growth rate. Blitzscaling means that you're willing to sacrifice efficiency for speed, but without waiting to achieve certainty on whether the sacrifice will pay off.
Three basics of blitzscaling
1. Blitzscaling is both an offensive strategy and a defensive strategy
2. Blitzscaling thrives on positive feedback loops. In that the company that grows to scale first reaps significant competitive advantages
3. Despite its incredible advantages and potential payoffs, blitzscaling also comes with massive risks.
For business model innovation, 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.
For strategy model innovation, blitzscaling business tend to play in winner-take-most or winner-take-all markets. The greater risk for a successful, growing business is to move too slowly and allow its competitors to win market leadership and first-scaler advantage.
For management innovation, this is necessary because of the extreme strains placed on the organization and its employees by hyper-growth. Companies that blitzscale have to rapidly navigate a set of key transitions as their organizations grow, and have to embrace counterintuitive rules like hiring "good enough" people, launching flawed and imperfect products, letting fires burn, and ignoring angry customers.
Market size, distribution, and gross margins are important factors in growing a company, but the final growth factor (network effects) plays the key role in 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.
Companies with a competitive advantage can quickly grow to the point where the increasing returns of network effects produce a winner-take-most or winner-take-all market. This also explains why the growth factor of distribution is as or more important to company success as the product itself - without distribution, it is difficult to reach the tipping point.
A significant number of operational issues arise simply because of human limitations. As much as we might wish that we and our colleagues could work tirelessly and seamlessly, regardless of the scale of the organization, the fact is that growth causes us to trip over a wide array of issues.
The power of modularity goes beyond just software development and engineering. The power of modularity, this principle makes it possible for a company like Amazon and its customers to build complex products out of smaller, standardized subsystems.
How the role of the founder changes in each stage:
Stage 1 (Family): The founder personally pulls the levers of hypergrowth
Stage 2 (Tribe): The founder manages the people who are pulling the levers
Stage 3 (Village): The founder designs an organization that pulls the levers
Stage 4 (City): The founder makes high-level decisions about goals and strategies
Stage 5 (Nation): The founder figures out how to pull the organization back from Blitzscaling and start blitzscaling new product lines and business units
