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

by Reid Hoffman

Successful blitzscaling is an exercise in serial problem solving. Each of the five stages requires different solutions to the same basic problems of people, product, finance, and so on. Each time you manage to solve a problem, the problem is never solved forever, it’s only solved for now. As the company continues to grow, you have to solve the same problem again, under a new and potentially radically different set of circumstances.

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.

Marines are start-up people who are used to dealing with chaos and improvising solutions on the spot. Army soldiers are scale-up people, who know how to rapidly seize and secure territory once your forces make it off the beach. And police officers are stability people, whose job is to sustain rather than disrupt. The marines and the army can usually work together, and the army and the police can usually work together, but the marines and the police rarely work well together. As you blitzscale, you may need to find new beaches for your marines to take rather than ask them to help patrol the existing ones.

Another important organizational arc is moving from generalists to specialists. During the early stages of blitzscaling, the need for speed and adaptability places a hefty premium on hiring smart generalists who can get many different things done in an uncertain and rapidly changing environment. But as the company grows, it needs to shift to hiring specialists who are less fungible but have expertise in an area that is crucial to scaling the organization.

In many cases, you should work to retain your generalists, both for their cultural and institutional knowledge, and for their ability to tackle new problems. But if you are unable to do so, and early generalists decide to leave the organization, you should try to maintain a positive relationship with them as members of your corporate alumni network.

Managers are frontline leaders who worry about day-to-day tactics: they create, implement, and execute detailed plans that allow the organization to either do new things or do existing things more efficiently.

By contrast, the role of the executive is to lead managers. For the most part, executives don’t manage individual contributors. Instead, they focus on vision and strategy. Yet they are still connected to the frontline employees because they are also responsible for the “fighting spirit” of their organizations; they need to be role models who help people persist through inevitable adversity.

The ideal, of course, is to hire an executive with past experience at a blitzscaling start-up that has already dealt with the challenges your company currently faces.

Hire someone who is already a known quantity to at least one member of the team.

Bring the new executive in at a lower level initially and let the executive prove himself or herself.

Once the executive has earned the team’s trust and credibility, consider promoting him or her.

One area that undergoes the most change during blitzscaling is the internal communications process. As the company grows, you have to shift from informal, in-person, individual conversations to formal, electronic, “push” broadcasting and online “pull” resources. You also have to shift from sharing all information by default to deciding on what is secret and what is shareable. If you don’t manage to develop an effective internal communications strategy, your organization will become disjointed and start to fall apart.

The weekly meeting is most effective when it serves as a mechanism to bring together the entire company, and for company leaders to convey key messages to employees with whom they don’t work directly.

A Tribal meeting should be well organized, with an agenda and other materials provided in advance so that participants can engage in an interactive discussion rather than simply listen to senior leaders talking or, worse, suffer through text-dense PowerPoint presentations. The goal shouldn’t be to make decisions in these meetings (unless the topic is one on which everyone can and should have input, like where to hold the holiday party); rather, it’s to maximize input from smart people and make sure that everyone feels heard. As a leader, you should seek out opinions from across the organization on important issues, but you can’t abdicate your responsibility and rely only on group consensus to make tough decisions.

Regular e-mails to all employees are a common best practice.

“If this is a decision based on opinions, then my opinion wins,” said Jeff. “However, data beats opinion. So bring data.”

Data is the lifeblood of decision making for any company, but it is particularly fundamental if it informs the design of your product, or if acquisition marketing is your key distribution strategy.

What matters isn’t what you collect but what you convey to decision makers.

The key stats will evolve as your company grows. You can’t simply “set it and forget it” when it comes to data. The critical metrics for predicting the long-term viability of your business may be very different as you achieve scale, particularly if the environment is changing rapidly. For that matter, your definition of “long-term” will change a great deal.

A growth team also helps by making growth a number one priority rather than a second- or third-class citizen. Elman likes to compare a typical marketing team to a Dickensian orphan, pleading with the product and engineering teams for resources: “Please, sir, may I have another landing page?” Any product changes or engineering infrastructure needed to drive growth, no matter how potentially valuable, typically end up taking a back seat to the product or engineering team’s own road maps. In contrast, a growth team’s engineers can move far faster because building scalable and extensible testing infrastructure is a core part of their jobs.

This is why you may need to blend quantitative and qualitative analysis.

“Don’t try a second channel until you have your main flywheel working. Most successful companies dominate one channel.”

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.

One important technique for making this decision is to consider both the magnitude of the opportunity as well as its potential for gain.

This is why it’s generally better to have your ten best people working on a single important project rather than splitting them to attack two different opportunities.

Conversely, when the potential for gain associated with your core opportunity declines, multithreading is often the answer to attack better growth opportunities.

Assuming that you make the decision to multithread your organization, the optimal management approach is to think of each thread as a different company. For each thread, you’ll need to identify a leadership team (“cofounders”) and create an incentive structure that allows it to operate with a great deal of independence and reap the benefits of success, without making your current managers so envious that it tears the organization apart. This is always challenging!

Poorly designed incentives can make it nearly impossible to shut down a thread, even if its performance is poor, since its leadership might fight tooth and nail to stay open.

Each product leader was the owner of a primary thread, but was also partially accountable and compensated for his or her work in supporting a fellow product leader as a secondary thread. This produced an additional layer of alignment, which reinforced the alignment of all being part of the LinkedIn “holding company.”

The reality is that many start-ups are like pirates: they lack formal processes and are willing to question and even break rules. This flexibility is critical in the early stages of building a great company. 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.

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?”

Rules are not holy scripture—they exist to make the world a better place, and thus if you can improve the rules, you should. On the other hand, rules usually exist for a reason. You need to have some humility when breaking rules and recognize that you might not understand all the consequences. It’s not always cheating to break the rules, but it is always a high-beta activity, hence the need for caution and compassion.

“How can we lock out the competition?” More blitzscaling is often the answer. Being the first scaler helps you acquire customers, lock in investors, and attract the best talent.

I like to generate fresh, innovative ways to play defense by asking my team, “If we were trying to compete with ourselves, what we would do? What if we were a start-up? Google? Facebook? Microsoft?” You can also seek outside perspectives, either by asking an independent board member or by leveraging network intelligence.

First, try to establish a standard. One of the classic Silicon Valley plays is to move from an app to a platform so that you can attract people to build on and to your platform (thereby leveraging the network effect of compatibility). Salesforce.com’s Force.com ecosystem is a great example of this. By offering the ability to build third-party applications on top of the Salesforce platform, Salesforce benefits from a “force multiplier.” There are over 2,800 apps on the Salesforce AppExchange, and an International Data Corporation (IDC) study showed that the Salesforce ecosystem generates 2.8 times the revenues of Salesforce.com itself. That means that while Salesforce.com has revenues of “only” $8.4 billion, its platform gives it the economic impact of a $32 billion company.

Second, offer a more complete solution, and try to outflank the competition. I like to say, “Both players are holding glasses of water, and are trying to tip over the other person’s glass.” In other words, if your competitor suddenly started offering its core product for free, could you still make money on your core product?

Financial strategy can also become competitive strategy. For example, Apple’s cash hoard allows it to move quickly and pay cash for any acquisition—two key advantages during a competitive bidding process.

A set of managers who are responsible for, and have strong executive control over, their individual markets globally An understanding of how those markets differ, which leads to a variety of plans for how to grow in each of those markets A unified executive team to coordinate global operations, including the activity of the individual managers leading operations in each country

The purpose of hiring a management team is to solve the organization’s problems in a more scalable way. The CEO should be the hub, and the executive team the spokes that connect the CEO to the frontline managers and employees operating where the rubber hits the road.

A strong executive team meets on a regular basis and focuses on the most important initiatives and issues, including active planning for the future.

In other words, you have to build management strategies that scale.

Any given management structure is likely to be temporary. You can’t run a Village the same way you run a Tribe, and you can’t run a City the same way you run a Village. But without structure, you won’t make it to the next stage of growth.

“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.” Maintaining a certain humility and a sense of perspective can help you navigate the changes in your role as you blitzscale your company. If you truly want to blitzscale, then speed has to take priority over everything—including your own ego. There are only three ways to scale yourself: delegation, amplification, and just plain making yourself better.

Can you find, hire, and manage good people, then transfer work over to them so you can tackle the challenges you’re uniquely suited to tackle? Many founders are so talented that they have a hard time letting go of tasks once they start performing them. They often think things like “Will someone else be able to do this as well as I can?” The answer is almost certainly “No, especially not at first, but they’ll probably figure it out over time, just like you did.”

Rather than delegate work you’re doing to others, can you hire people who amplify the work you do? The goal here isn’t to free you up from your work so that you can do other things; it’s to make the things you do much more impactful. This is actually one of the areas I’ve tried to develop and refine in my own life.

Trusted employees, freelancers, or even a team of outside consultants can be your amplifiers. The official nature of the relationship is less important than having assistance that you can trust.

Because your company grows and changes so quickly as you blitzscale, it’s crucial for you to figure out how to make yourself better just as quickly so that you don’t become the bottleneck that holds your company back.

This means talking with other smart people, often, so that you can learn from their successes and failures. It’s usually easier and less painful to learn from another’s mistakes than from your own.

Annual plans. Revenue guidance. Traditional business strives for order and regularity in management, operations, and financial results. This desire for order and regularity makes sense, because it allows companies to fine-tune their approach to be as efficient as possible, and gives shareholders a pleasing sense of stability. But when you’re blitzscaling, you’re explicitly choosing to sacrifice efficiency for speed, which means that the traditional focus on order and regularity needs to be replaced with a unique willingness to embrace a level of chaos that would horrify most Harvard MBAs and their professors.

Yet simply throwing up your hands is unlikely to bring success; passively succumbing to chaos is not a winning strategy. 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.