Blitzscaling: The Lightning-Fast Path to Building Massively Valuable Companies

by Reid Hoffman

Your teams need the ability—and the manpower—to relentlessly pursue a specific objective; asking a team to split its time between two different business lines is likely to result in the failure of both.

Mature business lines focus on incremental innovations that help them exploit a well-known market, whereas new threads focus on more radical innovations and exploring a new market opportunity.

Multithreading comes with a definite cost. Some people are eager to jump to multithreading as quickly as possible because they think it increases their competitive bandwidth. In reality, you should be thoughtful and careful about making this decision. Companies like Google grant a great deal of freedom to individual units, and, as a result, the different products and services do not fit together seamlessly. Many of Google’s services are strong enough to succeed on their own, but this means that they are succeeding in spite of, rather than because of, multithreading.

Generally, you should start adding threads when it’s strategically necessary, and with a realistic assessment of the negative impact that multithreading will have on organizational focus, resource efficiency, and so on.

Assuming that you make the decision to multithread your organization, the optimal management approach is to think of each thread as a different company.

The incentives of multithreading have to reflect the success of each thread, while still keeping the leadership of each thread invested in the success of all the rest.

You want to give leadership a reason to make each thread work, but not at the expense of the others; in other words, you want the “owners” of each of the threads thinking like an owner of the overall company.

“Sayings from Chairman Jobs” as guiding principles for the project. Real artists ship. It’s better to be a pirate than to join the navy. Mac in a book by 1986.

Pirates don’t convene a committee meeting to decide what to do when an enemy ship is approaching—they act quickly and decisively, and are willing to take risks because they know that the default outcome is death.

Early-stage start-ups are also on the full offensive, waging guerrilla warfare on bigger, established competitors. They are used to striking quickly, using surprise as a weapon, and taking on risks that established companies can’t or won’t.

Kris Kristofferson wrote and Janis Joplin (among others) sang, “Freedom’s just another word for nothing left to lose.”

One of the key ways to assess whether you’re being an ethical pirate or a sociopath is to ask, “Am I trying to change the rules for everyone, or just trying to get away with a personal exemption?”

At the Nation stage, the transformation from pirate to navy is complete. (If it’s not, either you don’t have a Nation or you have failed to make the shift and your Nation is in chaos—witness Uber in 2017.)

Google acquired Android in 2005, when it was still just a small, twenty-two-month-old start-up that was working on a new operating system for mobile phones. Google let Android founder Andy Rubin hire additional engineers to complete the product, while using its market power and reputation to establish the Open Handset Alliance, a consortium to promote Android that included hardware makers Samsung, HTC, and Motorola, carriers Sprint and T-Mobile, and chipmakers Qualcomm and Texas Instruments. With this backing,

Uber’s Travis Kalanick viewed his role at the helm of his giant company: “The way I do it, it doesn’t feel big,” [Kalanick] says, falling back on a favorite trope: that he approaches his day as a series of problems to be solved….“I would say you constantly want to make your company feel small,” he says. “You need to create mechanisms and cultural values so that you feel as small as possible. That’s how you stay innovative and fast. But how you do that at different sizes is different. Like when you’re super small, you go fast by just tribal knowledge. But if you did tribal knowledge when you’re super big it would be chaotic and you’d actually go really slow. So you have to constantly find that line between order and chaos.”

When I asked Dropbox founder Drew Houston to look back on his experience, he told me, “I think a lot of entrepreneurs start with a lot of insecurity about what they don’t know. What you want is not to be paralyzed by it, but to harness it—to use that nervous energy to learn and make yourself better. You’ve got to keep your personal learning curve ahead of the company’s growth curve.”

Start-ups get off the ground thanks to the individual talent and hard work of founders like Mark Zuckerberg and Brian Chesky, but they blitzscale into giant companies like Facebook and Airbnb because these founders learn how to delegate.

Jerry Chen likes to say, “There are no job descriptions for founders. If the role doesn’t change, there’s something wrong.”

“If you find the right source, you don’t have to read everything. I’ve had to learn to seek out the experts. I wanted to learn about safety, so I went to George Tenet, the ex-head of the CIA. Even if you can’t meet the best, you can read about the best.”

Talk with other entrepreneurs. Not just famous entrepreneurs, but people who are one year ahead, two years ahead, five years ahead. You learn very different and important things from those kinds of people. It really helps to have a sense of the longer-term arc, because the game changes quietly from phase to phase.

Blitzscaling a company isn’t easy; if it were, everyone would do it. Like most things of value in this world, blitzscaling is contrarian.

Embracing chaos, on the other hand, means accepting that uncertainty exists and therefore taking steps to manage it. If you know that you’ll make mistakes, the answer isn’t to sit back and wait for answers to find you, nor is it to charge ahead without preparation or forethought. You can still make smart decisions based on your estimate of the probabilities, even without certainty. And, perhaps most important, you can make sure that you have the ability to correct your mistakes.

When your organization is growing 300 percent per year, you might have to promote people before they’re ready and then swap them out if they sink rather than swim.

The internal chaos had the effect of normalizing radical change for our people, which meant they were better able to adjust to the radical changes the outside world was throwing at us.

Mark Zuckerberg credits speed for the success of Facebook. In an interview for Reid’s Masters of Scale podcast, Mark told us, “Learn and go as quickly as you can. Even if not every single release is perfect, I think you’re going to end up doing better over a year or two than you would be if you just waited a year to get feedback on all of your ideas. That focus on learning quickly is the focus of the company.”

Based on the launch data, we focused on trying to increase virality, which is how we became the first social network to allow you to upload your address book. This feature helped LinkedIn get to a critical mass of over one million user profiles, and the rest is history.

So, yes, if you are a rare genius and can accurately and consistently predict what the market wants, trusting your instincts will be faster than using trial and error to iterate your way to a better product. Good luck with that approach! As a mere mortal, I prefer market feedback.

One of the ways that blitzscaling entrepreneurs can stay alive is by deciding to let certain fires burn so that they can focus on the fires that if allowed to rage unchecked really will destroy the company.

believe that there is a Maslovian hierarchy of fires that applies to most rapidly growing start-ups, where the top of the list is the most important fire to fight first: Distribution Product Revenue model Operations Competition What’s next?

(1) the lack of revenue wasn’t going to be the proximate cause of death unless it prevented us from raising money and (2) the product fire was far more urgent and required our focused attention.

if your people can’t let fires burn, they’ll spend all of their time fighting them, which won’t leave any time for coming up with breakthrough opportunities to advance the business.

“Excess” cash allows you to better account for the unforeseeable—and the only thing that’s foreseeable about blitzscaling is that you will at some point encounter the unforeseeable.

The planning fallacy is that you make a plan, which is usually a best-case scenario. Then you assume that the outcome will follow your plan, even when you should know better.

Even if the money doesn’t prove to be necessary, a major financing round can also have positive signaling effects—it helps convince the rest of the world that your company is likely to emerge as the market leader, and can discourage investors from backing additional competitors.

For technology start-ups, the amount of money you need to raise will tend to be a function of two primary factors: people costs and the cost of outbound customer acquisition.

The classic rule of thumb in Silicon Valley is to raise enough cash for eighteen to twenty-four months of operations. This is because it usually takes about six months to raise your next round of venture capital, which means unless you have at least eighteen months of “runway,” you’ll have less than a year to make enough progress to convince venture capitalists that you’ve justified another round of investment.

all financing events are better played as a long game than a short game. We’re not the first to observe that investors always prefer to give their money to someone who doesn’t need it.

Brian Chesky of Airbnb defines culture in a simple and concise way: “a shared way of doing things.”

Netflix cofounder and CEO Reed Hastings told me, “Weak cultures are diffuse; people act differently, and don’t understand each other, and it becomes political.”

What is your organization trying to do? How are you trying to achieve those goals? What acceptable risks are you incurring to achieve those goals more quickly? When you have to trade off certain values, which ones take priority? What kind of behavior do you hire, promote, or fire for?

At LinkedIn, we tried to recruit people who were hardworking but also family-oriented. Our founding team members had families, and we wanted to establish the norm that employees could go home to have dinner with their families (and then work remotely later in the evening).

Culture is critical because it influences how people act in the absence of specific directives and rules, or when those rules reach their breaking point.

The primary culture of an organization typically originates in the functional area that is most critical to the success of the company.

The development of organizational culture is intimately intertwined with branding. Culture is central to the story that we tell ourselves and others about who we are and our place in the world, as well as the stories others tell about us!

Most cultures begin to form organically. As we’ve discussed previously, the founders of the organization have a major influence on the culture, simply because of who they are. If a founder believes that certain beliefs and practices are fundamental keys to winning, those beliefs and practices tend to be transmitted to the people who work closely with him or her.

Transmitting culture organically requires both personal interaction and time. This osmosis works during the Family and even Tribe stages of blitzscaling, but breaks down at later stages.

Reed told me. “People were worried that now that we were public, everything would go to shit—we’d put in a lot of process, and stop taking risks. What we’ve done is to promote employee freedom. If you want to operate with very few rules, you need to set context.”

The weekly e-mail cofounder Brian Chesky sends to all Airbnb employees is a powerful one. “You have to continue to repeat things” Brian told our class at Stanford. “Culture is about repeating, over and over again, the things that really matter for your company.”

Eric Schmidt shared how Google’s hiring strategy shaped its culture. “The people that you hire make your culture,” Eric said. “We’d hire people who were special in some way. You don’t hire generic people—you hire people who have had stress and achievement.”

When the business is growing that quickly, it’s usually desperate for bodies, and it can be tempting to simply pay whatever is necessary to get employees through the door. The problem is that you end up hiring mercenaries rather than missionaries. And if you’re tripling the company’s size each year, you can shift your company from a majority-missionary culture to a majority-mercenary culture in a single year.