Blitzscaling requires significant capital, which ultimately means a company must raise large rounds of funding from venture capitalists to pursue this strategy. If you are not pursuing an enormous TAM, then you should not blitzscale. If all three boxes aren’t checked, then you should consider a different growth strategy and avoid blitzscaling. (1) Pursuing an enormous TAM (2) Operating in a winner-take-all market (3) Truly defensible business model at scale Namely, Blitzscaling only works if your business has all of the following characteristics (“The Blitzscaling Checklist”):
Many companies try to leverage this strategy given the prominent examples of success (including the aforementioned) - raising tens if not hundreds of millions of dollars in venture capital to enable blitzscaling - however, there are specific criteria founders should consider when thinking about whether blitzscaling is right for them.
Many of the world’s best companies have used this growth tactic such as Facebook, Uber, Pinterest, and Airbnb. From these cases, we draw specific lessons that, if understood and appropriately addressed, would help new ventures effectively implement the strategy.Blitzscaling is an aggressive growth tactic coined by Reid Hoffman (founder of LinkedIn and successful venture capitalist). We examine the concept, its stages, and its prevalence before reviewing the different examples of how the strategy has been implemented for success (the good), cases of its failure in practice (the bad), and the extreme cases of ethical compromise by ventures (the ugly). While blitzscaling is being used heavily by investors in Silicon Valley, we look at exactly what comprises this new phenomenon and how it is used in practice. Another recent term is blitzscaling: funding a venture for extremely fast growth and prioritizing speed over efficiency in an environment of uncertainty. Unicorn is defined as a venture with a value of $1 billion, while a decacorn describes startups with a value of $10 billion. Terms that define this type of aggressive scaling have recently developed in Silicon Valley. The idea is to scale fast and seek huge returns for investors. Venture capitalists focus on these potentially disruptive technology startups and fund them furiously, advancing their speed of growth. Today’s disruptive innovations are driving the creation of numerous billion-dollar startups.
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