Blitzscaling

Blitzscaling requires designing a model primed for exponential growth. Key factors include appealing to a massive market, building in virality, having high gross margins, and leveraging network effects to generate self-reinforcing growth cycles.

Avoid products without market fit or models that can't scale operationally.

Continually adapt and challenge the status quo.

• Only blitzscale when speed in capturing the market is critical to success.
• Blitzscale when you must rapidly scale an innovation before rivals, not just beat them to market.
• Avoid blitzscaling low-margin businesses.

Moore’s Law – Computing power generally doubles every 18 months.

Automation – You want to automate your businesses; this is why Google’s server farms are running 24/7.

Adaptation – You must continually improve your company rather than just optimizing it.

Be contrarian – You need to challenge the status quo, sometimes, to be the leader in your field.

Bits not atoms – Bits are easier to move than atoms.  

Platforms – Software-based platforms can be distributed globally with great ease.

Free – With a free basic account and a premium paid account service you can reach a huge number of users through virality.

Marketplaces – Marketplaces have always been important in the business world.  

Subscriptions – Software-as-a-service is the dominant model for enterprise software.

Digital Goods – In-app purchases are the intersection between bits and atoms.

Blitzscaling management differs from traditional styles.

• Accept uncertainty and take steps to mitigate risk.
• Hire and fire for fit.
• Be ready to reorganize teams chaotically.
• Launch imperfect products and fix later.
• Let some problems remain while tackling bigger ones.
• Overinvest in funding.

Incumbents struggling against blitzscaling rivals have three options: Beat them conventionally, blitzscale yourself, or avoid competing and shift to stable markets.

Many choose avoidance, like IBM pivoting from hardware to software consulting.

Family to Tribe: Transitioning from family to tribe requires high levels of competence and/or a brilliant growth strategy.

Tribe to Village: At this stage, the founder transitions from doing everything to managing people in a more differentiated, specialized way.

Village to City: The founder still sets goals, strategies and high-level decisions as the company scales up.

City to National: Further growth requires pulling back from blitzscaling, with the founder focusing more on growing new product lines and business units.