What does Blitzscaling mean?
What does Blitzscaling mean?
How companies can grow really, really quickly.
TL;DR
Blitzscaling is the business strategy of prioritizing speed over everything else in an environment of uncertainty.
It’s the strategy you employ when you need to grow really, really quickly, often at the expense of other factors.
What does Blitzscaling mean?
Blitzscaling is the business concept of prioritizing speed over efficiency in an environment of uncertainty. It means to scale a business as quickly as possible, at the expense of other factors.
The word ‘Blitzscaling’ was coined by Reid Hoffman, Co-Founder of Linkedin, during a Standard University course. It comes from the German word ‘blitzkrieg’, which refers to a WW2 German war concept that prioritizes speed over all else.
Some of the world’s most valuable companies today have used this concept to achieve dominant market share in a short amount of time.
What is considered Blitzscaling?
The key features of blitzscaling are hyper growth, global scale (usually), and the ability to gain first mover of scale advantage (be able to be the first to achieve scale).
Speed is everything. Companies that are blitzscaling are growing really quickly. Uber’s revenue is currently growing 72% year-over-year!
Companies that blitzscale are usually in global markets. Examples are Airbnb, Stripe, and DoorDash. Startups that operate in local markets (i.e. a single country) typically don’t require the same intensity of speed and capital.
Finally, companies will blitzscale with purpose by aiming for first mover of scale advantages. Companies blitzscale with the intention of hitting an inflection point of profitability or market dominance.
How does a company Blitzscale?
Through three pillars of innovation: Business model, Strategy, and Management.
Business model innovation = how a company makes money. At the core, a company must have good technology, distribution, and high profit margins.
Strategy innovation = how a company can grow. There are seven proven models that can blitzscale:
Data Businesses (e.g. Google)
Platforms (e.g. Windows)
Free or Freemium (e.g. Dropbox)
Marketplaces (e.g. UberEats)
Subscriptions (e.g. Netflix)
Digital Goods (e.g. Fortnite)
Feeds (e.g. Instagram)
Management innovation = how a company hires, retains, and trains leaders how to adapt to its evolving demands.
Blitzscaling considers five stage of companies by # of employees: Family (1-90, Tribe (10s), Village (100s), City (1000s), Nation (10,000s). Each stage will have a different leadership, resourcing, and strategy need to grow.
Why is Blitzscaling important?
Blitzscaling is what you do when you need to grow really quickly.
It’s how companies today can achieve scale and market dominance and is virtually seen in every sector from enterprise analytics software to 15-minute grocery delivery.
It’s a relevant concept that everyone should be familiar with:
As founder, to consider blitzcaling as a strategy when building
As a business leader, when hiring talent to build an organization
As a consumer, to understand how software products work (i.e. why do some have such aggressive promos?)
Further Reading
Blitzscaling — Reid Hoffman, Chris Yeh
The Blitzscaling Basics — strategy + business
The Upstarts — Brad Stone