One of the ways Global Scaling Academy supports investors is through investor education, and there are numerous opportunities for investor members of our community to learn about blitzscaling and how it can serve as a decision support tool for their own venture investing activities. Examples include our "Blitzscaling for Investors" course, and the Blitzscaling Investor Network which we run in partnership with the leaders of our companion investment fund, Blitzscaling Ventures.
The most common question we get from our investor members is how to use blitzscaling as a framework to help determine if a company is "blitzscalable" and therefore an investor in that company should prioritize speed over efficiency in an environment of uncertainty.
To offer community members more insight into how to think through this question, I got on the line with my friend and co-author, Reid Hoffman, the co-founder of Linkedin and legendary investor in such iconic companies as Facebook and Airbnb, to ask him this same question that we hear so often: "when does my investment, which will be spent inefficiently in financial and human capital by a company, become a rational economic investment?
Here's a synopsis of what Reid had to say, watch the video above to her his full commentary.
- The approach towards deciding whether a company you're investing in should blitzscale resides in whether the prize is significant, meaning, is the prize a network, a marketplace, or a critical mass effect?
- To foresee the rationality behind such an investment and, thus, the significance of its prize, you must examine the elements of the company one-by-one in order to Blitzscale.
But do you have the bandwidth and skill on your investment team to do that currently? That's precisely one of the ways membership in our community benefits investors: by adding bandwidth to their team, and a strong filter for determining the scalability or even blitzscalability of their investment alternatives. The community is also a place where you can send your portfolio companies to ensure they're getting the best possible advice about how to implement an accelerated scaling, or blitzscaling, strategy.
In my conversation with Reid, he underlined that when investors are evaluating a company, and asking themselves whether or not they should invest to help it "get big-fast," that the real question is one of relative speed. "How do I get to critical scale first?" This is where understanding Blitzscaling comes into play.
If you enjoyed this excerpt from my conversation with Reid Hoffman, then you won't want to miss our monthly event "The Blitzscaling Breakout" where discuss the ins-and-outs of evaluating the blitzscalability of companies from the point of view of an investor with the members of our community in a peer-to-peer setting.