Reid Hoffman's Blitzscaling Toolkit

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What is blitzscaling?
What is blitzscaling?

It's time to establish some common ground.

It's time to establish some common ground.

First, a bit of pre-reading

We're ready to have a team discussion on Blitzscaling. We'll start by coming to some common ground on what Blitzscaling means to us, and then ask

Should we blitzscale?⁠

and

How do we blitzscale?⁠

. Before we do, we all need a common understanding of what Blitzscaling is. Pick your form of pre-reading and then we can reflect.

Recommended: Read the
`book`⁠
.

To really grasp the blitzscaling framework and establish common ground with your fellow stakeholders, you'll need to

read the book⁠

⁠

⁠

Short on time? Here's an outline.

Part 1: What Is Blitzscaling?

Blitzscaling: the framework and techniques that allow companies to achieve massive scale at incredible speed.

Three key techniques of Blitzscaling:

Business model innovation

Strategy innovation

Management innovation

Part 2: Business Model Innovation

"Design an innovative business model that can truly grow."

Four key business model growth factors:

market size

distribution

high gross margins

network effects

Two key business growth limiters

lack of product/market fit

operational scalability

Proven business model patterns

bits rather than atoms

platforms

free or freemium

marketplaces

subscriptions

digital goods

feeds

Principles of business model innovation

Moore's law

automation

adaption, not optimization

Contrarian principle

Part 3: Strategy Innovation

"Strategy innovation supports its own ecosystem of rapid growth in the face of risk and uncertainty."

When should you blitzscale?

a substantial & new opportunity

use your first-scaler advantage

learning curve

threat of competition

When should you stop blitzscaling?

Declining rate of growth (relative to the market and competition)

Worsening unit economics

Decreasing per-employee productivity

Increasing management overhead

Blitzscaling extends the simple three-step process of “Do Things That Don’t Scale” as follows:

Step 1: Do things that don’t scale.

Step 2: Reach the next stage of Blitzscaling.

Step 3: Figure out how to do one set of things that scale, while somehow also finding a way to do a completely different set of things that don’t scale.

Step 4: Reach the next stage of Blitzscaling.

Step 5: Repeat over and over until you reach complete market dominance.

5 Stages of Scale

Family: The Founder Personally Pulls the Levers of Hypergrowth

Tribe: The Founder Manages the People Who Are Pulling the Levers

Village: The Founder Designs an Organization That Pulls the Levers

City: The Founder Makes High-Level Decisions About Goals and Strategies

Nation: The Founder Figures Out How to Pull the Organization Back from Blitzscaling and Start Blitzscaling New Product Lines and Business Units

Part 4: Management Innovation

"One of the key features that sets global giants apart from those companies that flame out or implode before they can reach market dominance is an ability to evolve and optimize their management practices at each stage of growth."

8 key transitions

small teams to large teams

generalists to specialists

contributors to managers to executives

dialogue to broadcasting

inspiration to data

single focus to multithreading

pirate to navy

scaling yourself - founder to leader

9 counterintuitive rules of blitzscaling

embrace choas

hire Ms. Right Now, and not Ms. Right

tolerate "bad" management

launch a product that embarrasses you

let fires burn

do things that don't scale

ignore your customers

raise too much money

evolve your culture

Part 5: The Broader Landscape of Blitzscaling

"While blitzscaling is probably most applicable to high tech, its techniques can benefit any industry in which opportunities can demonstrate strong growth factors (market size, distribution, gross margins, and network effects) and overcome the growth limiters (lack of product/market fit and operational scalability)."

4 advantages of established companies who want to Blitzscale

scale

iteration

longevity

mergers & acquisitions

3 disadvantages of established companies who want to Blitzscale

incentives

unstaged commitment

public market pressure

3 options to defend against Blitzscaling

beat them

join them

avoid them

Part 6: Responsible Blitzscaling

"In an ideal world, blitzscaling organizations would embody all the virtues that society might desire from its businesses—a diverse and inclusive workforce, a strong sense of responsibility to shareholders and stakeholders, an ample supply of well-paying middle-class jobs, and executives who serve as moral role models and leaders of society. The unfortunate truth is that for all the good that blitzscaling produces, blitzscaling organizations can be guilty of the sins that afflict other types of companies, and actually face some inherent challenges even when trying to behave responsibly."

Even shorter on time? Here are the highlights.

Blitzscaling: the framework and techniques that allow companies to achieve massive scale at incredible speed.

You need to maximize four growth factors: market size, distribution, high gross margins, and network effects.

You'll need to overcome challenges of product/market fit and operational scalability.

Then, reflect & discuss

What stuck with you from the book? What kept you up at night? Add your top takeaways below.

Takeaway

Vote

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👉 Next up:
`Should we blitzscale?`⁠
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