I recently participated in a webinar along with my friend and co-author, Reid Hoffman, the co-founder and executive chairman of LinkedIn, in which we explored blitzscaling and how it can be applied in large organizations. There were more than 2000 corporate executives on the call, and we received a number of excellent questions that made it clear that large organizations are searching for, and struggling to find, the tools and techniques they need to bring greater speed to their innovation efforts.
The definition of Blitzscaling is "prioritizing speed over efficiency in an environment of uncertainty." It is most commonly seen in its purest form in markets with strong network effects, where becoming first-mover at scale is of utmost importance. The members of the audience shared a common question: What should we do to get there?
Naturally, you would think it makes more sense to be efficient in spending capital, in managing customer acquisition costs, if your goal is to create long term value, and these are the normal things we are taught to do if we want to make abusiness very valuable. But, as Reid explained, the wisdom of blitzscaling in this case is highly counterintuitive and requires you to know when it makes sense to be inefficient where your goal is to prioritize the speed to scale in an environment of unknowns. That means you need to know which unknowns are acceptable as foreseeable future risk factors, and which should be dealt with immediately.
The value of Blitzscaling is clearly evident in China, the land of Blitzscaling. Many of China's tech giants have been purposely created for this. The pattern they are following, and the reason why they are transforming the global technology industry, is, by default, Blitzscaling.
Whether you're a traditional venture investor, or a corporate investor, understanding the strategies employed by these market-transforming winners, and how to identify them earlier rather than later, is what will make the difference to you between getting that Cadillac or coming home with steak knives in your hands.
Investor members of our Community enjoy access to "Blitzscaling for Investors," a course developed to teach members how to apply the blitzscaling framework to venture investment decisions. Additionally, our monthly event series "The Blitzscaling Breakout" offers community members an opportunity to participate in real-time deal analysis using the framework. Finally, members may apply for our invitation-only Blitzscaling Investor Network program.