Blitzscaling … Reid Hoffman’s lightning-fast path to building massively valuable companies

November 29, 2018

Blitzscaling is the new book from LinkedIn co-founder Reid Hoffman who sold his networking business to Microsoft for $26.4 billion

At its core, the concept of Blitzscaling is about growing at a rate that is so much faster than your competitors that makes you feel uncomfortable. In short, Blitzscaling is prioritizing speed over efficiency in the face of uncertainty.

The name Blitzscaling comes from a World War II association with the term “blitzkrieg” or lightning war, where the attacker risks it all to either win or lose the battle.

Understanding Blitzscaling might means having a framework that can help your small organization to scale up or your large company to also benefit from a new and reinvigorated acceleration, which is critical to survival in a market that changes at a faster pace.

Fast growth

Blitzscaling looks at massive growth which is also accompanied by high uncertainty. Hoffman in an HBR interview said “Blitzscaling is what you do when you need to grow really, really quickly. It’s the science and art of rapidly building out a company to serve a large and usually global market, with the goal of becoming the first mover at scale.”

Importantly, therefore, it is not growth hacking.

Three features of Blitzscaling are

  • grow really quickly
  • usually at a global scale
  • gain the first mover of scale advantage

So rather than a process of experimentation with the aim of testing what works and what doesn’t efficiently, Blitzscaling is about being all in!

Strategic framework

Rather than a magic formula that works in each scenario, Blitzscaling follows a framework that revolves around three key ingredients:

  • business model innovation
  • strategic innovation
  • growth strategy

Speed above efficiency

This is a critical difference between scale up and Blitzscale. The former happens in a scenario of certainty and efficiency. You allocated the resources necessary to test what works and what doesn’t with fewer assumptions as possible. You have wider margins to test those things up to focus on what works. In a way instead, Blitzscaling is about survival. Thus, max speed is everything, because if you don’t reach the scale, you might be dead any time soon. That is why efficiency takes a back seat.

Uncertain

As Blitzscaling is an uncertain process, it might also require massive resources as it is a sort of calculated gamble where many mistakes will be made. Capital will be a crucial element to recover from those mistakes. Making a mistake, also big ones are part of Blitzscaling. In short, those who take the risks of Blitzscaling are able to also amass the rewards by building multi-billion companies at a global scale.

First-scaler advantage

One key reward of Blitzscaling is the first-scaler advantage. The first who succeed at Blitzscaling take all or most of the market which gives them a lasting advantage hard to overcome.

5 stages

The main stages of Blitzscaling usually are:

  • Family-scale, up to 9 employees
  • Tribe, defined in 10s employees
  • Village in 100s of employees
  • City in 1000s of employees
  • Nation in 10,000s employees

While this is a simplification, it is crucial to understand that a company which is Blitzscaling will go through several stages, each of which has differentiating features. For instance, in some stages financing might be the most important aspect, while in others building the winning team is.

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