Do you have a startup and would you like to see it grow quickly?
The secret is blitzscaling, a set of techniques for scaling up at a fast pace that will eliminate competitors from your path. The goal is not to go from zero to one, but from one to a billion as soon as possible.
Reid Hoffman and Chris Yeh teach the practical aspects of blitzscaling, when and why to use it, and the global impact of the companies that practice it.
It doesn't matter if your company has five or five thousand employees, blitzscaling is the best technique to beat a world in which speed is the biggest competitive advantage.
The book "Blitzscaling" was published in 2019 by the publisher Alta Books and shows that to use this technique, you must choose between taking the risk and the discomfort when implementing it, or accepting the even greater risk of loss if your competitor adopts the blitzscaling before you.
Current large companies have adopted this strategy of hypergrowth, such as Netflix, Amazon, Airbnb, and Uber.
The main examples of companies that have applied blitzscaling are found in Silicon Valley, but the lessons are universal and can be applied anywhere in the world. However, it is not that simple and has a number of challenges.
Reid Hoffman is an American entrepreneur, venture capitalist, and author. He is known for being a co-founder of LinkedIn, the largest social network of professional relationships in the world. He is also known to be one of PayPal's first employees.
His name also appears on the list of billionaires that is released by Forbes magazine annually. In 2019 he appeared with a fortune estimated at $ 1.7 billion.
Chris Yeh is a co-founder of Wasabi Ventures and an entrepreneur and has also worked with high-tech startups.
In addition to being one of the authors of the book "Blitzscaling", his other books help corporate leaders, entrepreneurs, ordinary people to understand how the Internet has changed the way we relate.
The book "Blitzscaling" is indicated for entrepreneurs, company founders, and anyone who is interested in optimizing the growth of their business.
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The blitzscaling can be defined as a "strategy and set of techniques to drive and manage extremely rapid growth, which prioritizes speed over efficiency amid uncertainty".
In other words, it is an accelerator that allows your company to grow at a furious pace, which removes competition from its path.
When you adopt it, you need to make decisions and commit to them even if you are not 100% confident. Blitzscaling requires not only the entrepreneur's courage but also an environment willing to finance smart risks with financial and human capital.
Many may wonder why someone would adopt this strategy to take so many risks, mainly because you will need enough reserve capital to recover from the many mistakes you will make along the way.
According to authors Reid Hoffman and Chris Yeh, even with all the risks, blitzscaling remains a powerful tool for entrepreneurs.
Blitzcaling is an attack and defense strategy. Regarding the attack, you surprise the markets, ignoring well-defended niches to take advantage of opportunities. Furthermore, it facilitates access to capital, as investors prefer to invest in market leaders
Regarding defense, due to the fast pace, your competitors will have little space and time to counterattack.
Despite its incredible advantages and potential returns, blitzscaling also carries enormous risks. You will have a lot of problems, make sure of that. Sometimes, you will spend more time correcting errors and problems than gaining speed with advancement.
Authors Reid Hoffman and Chris Yeh use a community metaphor to describe the main stages of blitzscaling, based on the number of employees the company employs:
When you are the head of a family, you have a closer relationship with all members. On the other hand, when you are head of a nation, you will be responsible for a multitude of officials and you will not even know the majority.
A company's business model describes how it generates financial returns by producing, selling, and supporting its products.
According to Reid Hoffman and Chris Yeh, an excellent business model is one that maximizes the four main growth factors and minimizes its two limitations.
The book exemplifies all of the above through four companies that have carried out blitzscaling: LinkedIn, Google, Amazon, and Facebook.
After all, it doesn't matter how much demand you generate if your infrastructure or your human resources don't support it.
Reid Hoffman and Chris Yeh explain some patterns of business models that exploit growth factors and avoid constraints. Although they do not guarantee an innovative business model, they are good options for the entrepreneur.
The first standard is to use electronic bits instead of physical materials, such as Facebook and Google. Electronic businesses serve a global market and make it easier to bypass growth constraints because you produce faster with software products than with physical products.
The second proven standard is the use of technology platforms like Windows. Today's software-based platforms reach global distribution almost immediately.
The third standard is to create free and premium products. The idea of the free product is a strategy to attract and acquire a critical mass of users, while the paid version allows the company to capitalize on these users, as long as this value is adequate.
Blitzscaling should only be used when you have determined that speed in the market is your critical strategy for achieving significant results. There are a few factors that you should watch out for if it's the right time to do blitzscaling.
First, a new big opportunity is needed. The risk and pain of doing blitzscaling are not worth it if the opportunity is tiny, so make sure of that before implementing this strategy.
Check the competition. Ask yourself, "Can anyone see this opportunity before me?" If the answer is yes, then, in order to eliminate competition, it compensates for the increase in failures resulting from rapid transformation.
This strategy is not permanent. You practice blitzscaling when your market is large or growing fast. On the other hand, when your market is already stagnant or has reached a limit, you should stop using it.
There are also other factors that warn of a stagnant strategy: decreasing growth rate, reduced employee productivity, and increased management overhead.
An example of a company that should have stopped blitzscaling before is Groupon, as it sought growth without efficiency, which overheated and weakened the market.
You have complete freedom to implement blitzscaling or not, it is not compulsory. So, analyze your goals well before making any decisions.
The authors reveal nine decisive transitions that guide the company through the stages of blitzscaling:
In this strategy, it is necessary to follow new controversial rules in relation to globally accepted practices.
Blitzscaling can also be implemented in large companies. However, it is important to consider the advantages and disadvantages. The main advantages are the scale that the company already has, longevity, mergers, and acquisitions.
On the other hand, the main disadvantages may be the incentives that favor more cautious expansion than aggressive growth, unrealized investments, and pressure from publicly traded companies.
In "Hacking Growth", Sean Ellis and Morgan Brown present an innovative strategy through analysis, ideation, prioritization, and testing, selecting a qualified team to generate the feeling of "must-have" in potential customers.
You will see how this growth philosophy can help you to boost your business.
In the book "Zero to One", the author Peter Thiel gives the following tip: when there is competition, companies do not have power over the market. Therefore, they must sell their products at the price regulated by the market or they will be slaughtered by the competition. When you have a monopoly, you're the one who dictates the rules.
The author Leigh Gallagher, in "The Airbnb Story", discusses the company's trajectory, since its foundation in 2008, going through the accelerated development and the challenges that its founders had to overcome over the years and the prospects for the future of the brand Airbnb.
Blitzscaling has redefined numerous sectors, being the main standard by which the main new technologies and companies establish themselves and replace their predecessors.
It also allows established companies to anticipate and adapt better to changes in the market scenario.
According to the authors, "a better understanding of the positives and negatives of blitzscaling will help governments not only make appropriate adjustments to encourage them, but also improve the chances of achieving adequate social results".
Remember that speed and uncertainty are the new constants in the era of blitzscaling.
We hope you enjoyed our summary and that the teachings of authors Reid Hoffman and Chris Yeh can be useful for your venture. Leave your opinion in the comments, your feedback is important to us.
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