Blitzscaling

Insightful read. I primarily read it out of curiosity and it satisfied it. I liked that the book referenced companies and events that happened when I was alive, right under my nose while I was busy not caring. The book set out to not only explain Blitzscaling but also explain why, how and when it needs to be done.

It was also a fairly short read. The book reminded me that China exists. That all organizations are organizations, even non-profits. That hiring is key. That moats are key and why culture is important.


You have to be good at building a product, then you have to be just as good at getting users, then you have to be just as good at building a business model. If you’re missing any of the links in the chain, the whole chain is broken.

What we did is we went on Craigslist and offered $40 to anyone who’d come in for half an hour—a poor man’s usability test. We’re like, “All right, sit down. This is an invitation to Dropbox in your e-mail. Go from here to sharing a file with this e-mail address.” Zero of the five people we tested succeeded. Zero of the five even came close. This was just stunning. We’re like, “Oh my God, this is the worst product ever created.” So we made a list of like eighty things in this Excel spreadsheet, then just sanded down all these rough edges in the experience, and watched our activation rate climb.

blitzscalers, such as Amazon or the Chinese hardware makers Huawei and Xiaomi, deliberately price their products to maximize market share rather than gross margins.

Word’s dominance meant that its document file format became the standard;

When you start a new company, the key product/market fit question you need to answer is whether you have discovered a nonobvious market opportunity where you have a unique advantage or approach, and one that competing players won’t see until you’ve had a chance to build a healthy lead.

Frequently, you won’t be able to fully validate product/market fit before you commit to building a company. But you should try.

The best way for a small, resource-strapped team to assess potential strategies is to leverage what we dubbed “network intelligence” in our previous book, The Alliance. Even a small group of founders is likely to have a huge collective personal network of smart people with relevant knowledge or experience. Initiate a conversation, inviting them to challenge your idea and tell you what else you should consider.

Even if you don’t compete with blitzscalers for customers, you probably compete with them for office space and employees.

One of the major advantages that companies in Silicon Valley enjoy is generations of rapidly scaling companies that have produced a rich supply of executives with blitzscaling experience.

“If this is a decision based on opinions, then my opinion wins,” said Jeff. “However, data beats opinion. So bring data.”

For a company like Google that’s doing a hundred different things, there’s a very long breadline to get the next good engineer. And if you’re project #35, which is about where Google Drive was on their list, it’s going to take a long time before that team gets fed with any amazing people. When you consider the eleven players you put on the field versus your counterpart at a big company, you can actually have a massive talent advantage. Not because Google doesn’t have great engineers; they probably have better engineers than you. But the leader of the project is a midlevel product manager for whom it’s just the next rung on the ladder. As a founder, you’re just so much more committed, and your team is so much more committed.

Can you find, hire, and manage good people, then transfer work over to them so you can tackle the challenges you’re uniquely suited to tackle? Many founders are so talented that they have a hard time letting go of tasks once they start performing them. They often think things like “Will someone else be able to do this as well as I can?” The answer is almost certainly “No, especially not at first, but they’ll probably figure it out over time, just like you did.”

Because your company grows and changes so quickly as you blitzscale, it’s crucial for you to figure out how to make yourself better just as quickly so that you don’t become the bottleneck that holds your company back.

Since you’re going to face new challenges during every stage of blitzscaling, you have to make yourself into a learning machine. My friend Elon Musk is a great example. He dropped out of Stanford’s PhD program in applied physics because he thought he could learn more on his own!

Talk with other entrepreneurs. Not just famous entrepreneurs, but people who are one year ahead, two years ahead, five years ahead. You learn very different and important things from those kinds of people. It really helps to have a sense of the longer-term arc, because the game changes quietly from phase to phase.

It’s not that you should strive to produce a bad product. Rather, if you need to choose between getting to market quickly with an imperfect product or getting to market slowly with a “perfect” product, choose the imperfect product nearly every time. Getting to market fast allows you to start getting the feedback you need to improve it. Any product that you’ve carefully refined based on your instincts rather than real user reactions and data is likely to miss the mark and will require significant iteration anyway.

Engineers hate doing throwaway work. Not only is it wasteful, it offends their sense of efficiency. They are firm believers in the conventional wisdom that says it’s better to build your product right the first time, so you only have to build it once. But when you’re blitzscaling, inefficiency is the rule, not the exception. To prioritize speed, you might invest less in security, write code that isn’t scalable, and wait for things to start breaking before you build QA tools and processes. It’s true that all of these decisions will lead to problems later on, but you might not have a later on if you take too long to build the product. A hack that takes a tenth of the time may be more useful than an elegantly engineered solution, even if it has to be thrown away later.

The classic rule of thumb in Silicon Valley is to raise enough cash for eighteen to twenty-four months of operations.

Drew Houston makes sure that all Dropbox employees are aware that they need to help re-create the culture. “We tell people, ‘You might have just joined last week, but sooner or later, you’ll be an old-school Dropboxer too. So remember the things you like about this place now, because it’ll be your responsibility to make sure those things stick around.’ ”

Successful companies generally assume that they already have something valuable, which means risk taking tends to be penalized. If you make the play and fail, you’ve destroyed a valuable thing. That’s not something a start-up faces—a start-up is dead by default, so there is nothing to lose.

Another advantage comes from China’s massive talent pool. The sheer abundance of human capital allows companies in China to scale their organizations more quickly, including opening multiple offices in multiple cities. China also has a thing or two to teach Silicon Valley about tapping the entire talent pool. For example, China has proven an amazing environment for women entrepreneurs. Of the seventy-three women in the world who are self-made billionaires, forty-nine (over two-thirds!) live in China.

In contrast, companies like Apple and Amazon have to win their customers every day, and if they fail to do so, those consumers can simply buy Dell laptops and order books from Barnes & Noble.

Like it or not, when your company is a City or a Nation, you need to start thinking like a mayor or a president and set rules for the good of humanity as a whole rather than just for the good of your profits.

If you’re able to climb the learning curve faster than others, you have the opportunity to create massive value from it.

Seek out blitzscaling companies and markets; that’s where you’ll find the greatest growth and opportunity.

Jan 2021. Built with Tailwind and Jekyll.