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Early stages grow really fast and get feedback. Iterate fast.
WeChat, Airbnb and slack stories..
Dominant World leading business in short period of times.
Internet has caused massive speed
Network effect.. each user or usage makes the product better.
Geongarry Glen ross.. winner takes all markets.
Extremely rapid growth prioritising speed over efficiency in an environment of uncertainty.
Blitz scaling > get big fast. Much more than that
When a market is up for grabs, risk is playing it too safe. If you loose efficiency is irrelevant and if you win efficiency isn't that important.
Make and commit decisions even when your confidence level is less than 100%
Needs courage, skill and an environment that is willing to take intelligent risks
Basics of Blitz scaling
1. Both an offense and defense strategy
2. Thrives on positive feedback loops
3. Comes with massive risks
First scaler advantage
- capital and talent move to market leader
- help grow faster and raise more capital and better talent. Cycle goes on
5 stages of Blitz scaling
1. Family 1-9
2. Tribe - 10s of employees
3. Village - 100s of employees
4. City - 1000s of employees
5. Nation - 10000s of employees
- business model innovation
- strategy innovation
- management innovation
- clay chritensen .. jobs to be done
- 4 growth levers
1. Market size and growth rates
2. Distribution - leveraging existing networks or creating virality. Virality almost always requires a free or freemium option.
3. High gross margins. Better unit economics help fund future growth of the company
4. Network effects. Every new user increases the value of the product.
- 2 growth limiters - lack of product market fit and operational scalability
Business model proven patterns
- bits not atoms
- free or freemium
- digital goods
Underlying principles of business model Innovation
- Moore's law.. computing power doubles 18 months
- adaptation not optimization
- the contrarían principle
Eight key transitions
- small teams to large teams
- generalists to specialists
- contributors to managers to executives
- dialogue to broadcasting
- inspiration to data
- single focus to multi threading
- pirate to navy
- scaling your self. Founder to leader
Three ways to grow yourself
- making yourself better
9 counter intuitive rules for blitzscaling
- embrace chaos
- hire ms right now not ms right
- let fires burn
- do things that do not scale
- evolve your culture
- raise too much money
- ignore your customers
- launch a product that embarasses you
- tolerate bad management
Blitzscaling in a large organization advantage
- existing scale
- mergers and acquisitions
- incentives. Poor risk taking.
- unstaged commitment
- public market pressure
- leverage people and businesses with prior blitzscaling experience
- leverage knowledge of venture capitalists
- treat it as a company within the company. Insulated from others. Android at Google, kindle at Amazon. Macintosh at Apple
Responding to a blitzscaling
- beat them. May fail on its own.
- join them
- avoid them. Book stores and Amazon. Sell experience not books.
Drew houston- you have to be good at 3 things
- building a great product
- getting users or distribution
- building a business model
Airbnb creating distribution by allowing hosts to post on Craigslist with a single click. Tap into a bigger platform for distribution
Brian chesky - do everything by hand until it becomes too painful, then automate. Photographers was a list managed by founders then by an employee and finally automated.
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