Blitzscaling
three dimensions to the idea of scale
growing customer base
According to the quantity
growing revenues
What issue will run into when blitzscaling?
- Will bear much higher risks than companies that follow a normal and rational expansion process.
Offense stategy: It takes a certain scale to be valuable
Defense strategy: Expansion speed have to be
faster than competitors
eBay
PayPal
Winner-take-most position
When does a start-up begin to blitzscale?
- It's a process usually starts between the tribe and village scale
- Competition you might encounter
At the high end
At the low end
Established brand may think about how to use their existing assets to capture part or all of the part you have acquired.
Other start-ups may launch their own version, cooperate with your product or service, and make significant achievements in the market
Ex: Groupon
Encountered competition between the upper and lower sides. It was unable to rapidly expand its scale and build long-lasting products, so it failed to fully realize the opportunity to transform the industry.
At this process, you have resolved the question of whether the product fits the market. You have certain information, and you know what the competition looks like.
- New ventures have become pioneers through lightning expansion
Fast
Focus
- It is always inefficient in management, which will quickly burn a lot of capital.
Ex: Uber
No face-to-face interviews or qualification surveys are required. They rapidly expand engineering staff.
Ex: Paypal
customers are angry about Paypal compounding rate, receiving complaint all day.
open a customers service office, had 100 active customer-service people fielding e-mail to serve the customers
If there are no rules, how do you come up with your approach?
- To find a certain advantage that is different from other competitors who follow traditional wisdom to do things.
- Heuristics can lead to radically different organizational outcomes.
two different blitzscaling companies
Google: Flat organization
Microsoft: built up hierarchy
There are no more than eight direct subordinates, which may be more efficient in management. The purpose is to be extremely focused on the development of technology
Something else important about heuristics
- Specialization at all scales becomes more important.
- Need to have higher reliability.
- From single-threaded organization to multi-threaded organization.
Facebook shifting from "Move fast and break things" to "Move fast with stable infrastructure."
- Culture is important to blitzscaling.
Because the organization grows very fast, you must hold employees to be accountable to each other on the basis of level or colleague to colleague, rather than being responsible vertically and directing from top to bottom through hierarchy.
From "village" to "city", various functions will begin to differentiate
Google's AdWords
Microsoft Office
Do different pockets of the company use different playbooks?
Google developed two device operating system
Android which is developed in Java. However, the Android team did not follow Google’s standard code review process to run its software, which promote the success of the project.
Chrome which is developed in C++.
what first-order problems are you solving?
- A general rule of management is that if there is a problem with the team's operation, it must be resolved immediately.
- Solve the right problem at the right time.
- Employees are displeased by the lack of a clear scope of responsibilities. However, the thing that keeps these companies from disintegrating is to be excited about what is going to happen and the vision for a better future.
Google only hire people with a high academic grade point average (GPA) from prestigious schools. In terms of heuristics, this is obviously harmful, but if your goal is to quickly hire a large number of smart generalists, it makes sense.