Reid Hoffman - Blitzscaling

The willingness to take on the risks of blitzscaling is one of the major reasons why Silicon Valley has produced such a disproportionate share of blockbuster companies in comparison to other geographies. To be fair, it has also produced a disproportionate share of financial disasters—hence the word “risk” when talking about blitzscaling. But as the rise of juggernauts like Alibaba and Spotify illustrates, blitzscaling is also starting to take off around the world.

TECHNIQUE #3: MANAGEMENT INNOVATION

The final technique required for blitzscaling is management innovation. This is necessary because of the extreme strains placed on the organization and its employees by hypergrowth.

I am fond of pointing out to entrepreneurs and executives that “in theory, you don’t need practice.”

What I mean is that no matter how brilliant your business model and growth strategy, you won’t be able to build a real-world (i.e., non-theoretical) blockbuster company without a lot of practice. But that problem is magnified when you’re trying to blitzscale.

The kind of growth involved in blitzscaling typically means major human resources challenges. Tripling the number of employees each year isn’t uncommon for a blitzscaling company. This requires a radically different approach to management than that of a typical growth company, which would be happy to grow 15 percent per year and can take time finding a few perfect hires and obsessing about corporate culture. As we will discuss in more detail later in the book, 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.

Over the course of this book, we’ll see how business model, growth strategy, and management innovation work together to form the high-risk, high-reward process of blitzscaling.

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