Blitzscaling looks at the strategy of rapid growth startups across the world. It delves into the strategies used when speed is more important that efficiency. Hoffman, a cofounder of Paypal and LinkedIn seems to hold a keen understanding of how to make this work. He has two humongous companies to show for this understanding. The book covers a set of counterintuitive principles of blitzscaling. Hoffman illustrates these principles through examples of well known companies.
Key Takeaways
Memorable Quotes
Rating: 8/10
There are a lot of great tactics and strategies covered in this book. It does sometimes come across as some chest pumping from Reid – "at LinkedIn we did [X, Y, Z] and it worked..." I'd still recommend this to any entrepreneur, especially anyone currently scaling a business. Aspiring startup founders will also find some worthwhile thinking points here.
Key Takeaways
- Blitzscaling is a strategic decision your company must make.
- Blitzscaling is most appropriate when you're playing in a winner take all market.
- Blitzscaling means prioritizing speed over efficiency and other "common sense" business practices.
- Blitzscaling companies find creative ways to win their markets.
- Blitzscaling takes many more resources than normal growth.
Memorable Quotes
- There’s a common misconception that Silicon Valley is the accelerator of the world. The real story is that the world keeps getting faster—Silicon Valley is just the first place to figure out how to keep pace. While Silicon Valley certainly has many key networks and resources that make it easier to apply the techniques we’re going to lay out for you, blitzscaling is made up of basic principles that do not depend on geography.
- Facebook excelled at distribution. As noted earlier, Facebook’s early focus on college students, which caused some to dismiss it as a niche product, was actually part of an extremely successful distribution strategy. To achieve incredible virality, Facebook would deliberately delay launching at a college campus until over 50 percent of the students had requested it so that local critical mass was reached almost immediately. Facebook further benefited from leveraging existing friend networks to expand outward from its original college user base. As users experienced the benefits of staying connected via Facebook, they naturally wanted to add their off-line friends to the network.
- Slack had spent nearly five years and $ 17 million on development prior to its public launch in February 2014. Just two months later, before the end of April, it had raised another $ 43 million. Both of these investments took place before Slack had proven its revenue model and started generating significant sales. Slack’s freemium business model (offering a free service and encouraging users to upgrade later to becoming paying customers) meant that even after two months of rapid user growth, the company hadn’t proven its ability to make money. Fortunately for Slack and its investors, this aggressiveness paid off. As the initial wave of free users started converting to paid, Slack was able to raise an additional $ 120 million six months later to accelerate its growth even further.
- Sadly, premature blitzscaling can sometimes kill a nascent market by “poisoning the well” so dramatically that investors and entrepreneurs avoid the space. For example, Webvan’s notorious failure kept most players out of the grocery delivery space for over a decade.
- My friend Marc Andreessen has argued that “software is eating the world.” What he means is that even industries that focus on physical products (atoms) are integrating with software (bits). Tesla makes cars (atoms), but a software update (bits) can upgrade the acceleration of those cars and add an autopilot overnight. The spread of software and computing into every industry, along with the dense networks that connect us all, means that the lessons of blitzscaling are becoming more relevant and easier to implement, even in mature or low-tech industries. To use a computing metaphor, technology is accelerating the world’s “clock speed” (the rate at which Central Processing Units [CPUs] operate), making change occur faster than previously thought possible. Not only is the world moving faster, but the speed at which major new technology platforms are being created is reducing the downtime between the arrivals of each wave of innovation.
- In the words of leadership guru Marshall Goldsmith, “What got you here won’t get you there.” Market share and revenue growth earn headlines, but you can’t achieve customer and revenue scale without scaling up your organization, in terms of the size and scope of your staff, as well as your financial, product, and technology strategy. If the organization doesn’t grow in lockstep with its revenues and customer base, things can quickly spiral out of control. For example, during a period of blitzscaling in the late 1980s and early 1990s, Oracle Corporation focused so single-mindedly on sales growth that its organization lagged badly on both technology (where it fell behind archrival Sybase’s) and finance and nearly went bankrupt as a result. It took the turnaround efforts of Ray Lane and Jeff Henley to stave off disaster and reposition Oracle for its later success.
Rating: 8/10
There are a lot of great tactics and strategies covered in this book. It does sometimes come across as some chest pumping from Reid – "at LinkedIn we did [X, Y, Z] and it worked..." I'd still recommend this to any entrepreneur, especially anyone currently scaling a business. Aspiring startup founders will also find some worthwhile thinking points here.