In one sentence
When a business has strong growth potential and competitors can quickly copy or overtake it, speed may matter more than near-term efficiency. Blitzscaling is a conditional strategy—not a universal startup prescription—for reaching dominant scale before rivals do.
Overview
The book, co-written by Reid Hoffman and Chris Yeh and published in 2018, develops a framework originally associated with their Stanford course. It covers business-model design, competitive strategy, hiring, management, culture, and the changing role of founders as companies move from startup to scaleup. Its central examples come largely from technology companies and network-effect businesses.
Core ideas
Blitzscaling is speed over efficiency
Traditional management seeks reliable growth, cost control, and operational efficiency. Blitzscaling accepts waste, unfinished systems, confused processes, and sometimes losses when moving quickly can secure a decisive market position.
The goal is market dominance, not merely product launch
The relevant transition is not simply from zero to one. It is from an initial product-market foothold toward global scale, where network effects, brand recognition, distribution, data, or infrastructure can make the leading company increasingly difficult to displace. Airbnb is used as an example of reciprocal network effects between hosts and guests.
Use the strategy only under suitable conditions
Blitzscaling makes most sense when the market is large, growth is unusually fast, competition is intense, and scale creates meaningful advantages. If demand is uncertain, the market is small, or speed does not improve defensibility, rapid expansion can magnify mistakes rather than create value.
Each growth stage requires a different organization
The company must repeatedly replace informal practices with more specialized roles, clearer management systems, and stronger coordination. What works for a few employees can become a bottleneck at dozens or hundreds. Scaling therefore involves organizational redesign, not just adding staff.
The founder’s job changes over time
Founders may begin as product builders and generalists, then become recruiters, culture-setters, strategic decision-makers, and leaders of leaders. Remaining personally involved in every decision can prevent the organization from scaling.
Hiring and culture are growth infrastructure
Rapid growth requires recruiting ahead of current needs, selecting people who can operate amid ambiguity, and preserving a culture that supports speed without making accountability impossible. Culture must evolve as the organization becomes more complex.
The strategy tolerates controlled chaos—but not unlimited chaos
The authors distinguish temporary disorder that buys speed from dysfunction that destroys the company. Leaders must decide which problems to postpone, which risks to accept, and when a workaround has become too costly to leave in place.
Blitzscaling has external costs and serious failure modes
The approach can encourage cash burn, poor customer treatment, regulatory conflict, employee strain, and winner-take-most behavior. Critics argue that the book sometimes treats market dominance as evidence of success while giving insufficient weight to moral and social consequences, particularly in cases such as Uber.
Practical takeaways
- Before pursuing speed, identify the specific advantage that scale creates: network effects, distribution, learning, brand, switching costs, or lower unit costs.
- State the conditions that would justify blitzscaling and the signals that would end it. Do not confuse investor enthusiasm or vanity metrics with evidence of defensible demand.
- At every growth phase, ask: What decisions should remain centralized? What responsibilities must be delegated? Which roles, processes, and systems are now missing?
- Treat hiring, management capacity, internal communication, and culture as constraints on growth—not administrative details to solve later.
- Separate reversible imperfections from irreversible risks. A rough internal process may be tolerable; unsafe products, regulatory violations, financial insolvency, or damaged trust may not be.
- Use the book as a counterweight to excessive caution, not as permission to ignore unit economics, customers, employees, or public obligations.
Caveats and counterpoints
- The case studies are disproportionately drawn from Silicon Valley and digitally enabled companies, especially businesses with network effects; the framework transfers less directly to capital-intensive, regulated, local, or slower-growing industries.
- Many examples are successful companies viewed retrospectively. This creates survivorship bias: the book explains what winners did, but cannot show how many firms copied similar tactics and failed.
- “Speed” is not a single measurable variable. Faster hiring, product releases, fundraising, geographic expansion, and user acquisition carry different risks and may conflict with one another.
- The book’s pro-growth orientation can understate who bears the costs of aggressive expansion. Kirkus characterizes its worldview as highly competitive and warns that the treatment of ethics and customer impact is limited.
- Blitzscaling is not the same as skipping validation. Scaling a product that has not demonstrated genuine demand can make the eventual correction more expensive.
Questions worth revisiting
- What concrete market dynamic would make speed more valuable than efficiency in this business?
- What does scale improve here, and how quickly could competitors imitate the offering?
- Which expenses are strategic investments in speed, and which are merely waste?
- What organizational failure is most likely at the next stage of growth?
- What ethical, legal, employee, or customer costs would the strategy impose—and who would bear them?
- What evidence would show that we should stop blitzscaling and return to disciplined optimization?
Return to this when…
Return to the core-ideas section when deciding whether a young company should prioritize rapid market capture over efficiency. Return to the caveats before applying the framework outside network-effect technology businesses or using growth metrics to excuse weak economics, poor governance, or harm to stakeholders.
Highlights
Ultimately, Brian decided not to buy Wimdu, swayed in part by the arguments of his key advisers. Facebook founder Mark Zuckerberg counseled him to fight. “Don’t buy them,” he said. “The best product will win.” YC’s Paul Graham gave similar feedback. “They’re mercenaries. You’re missionaries,” he told Brian. “They’re like people raising a baby they don’t actually want.”
But perhaps the most important impact for businesses has been the rising significance and prevalence of so-called network effects that occur when increased usage of a product or service boosts the value of that product or service for other users. For example, each additional Airbnb host makes the service a tiny bit more valuable for every other Airbnb guest and vice versa. Each additional WeChat user makes the service a tiny bit more valuable for every other WeChat user, and so on. Network effects generate a positive feedback loop that can allow the first
Blitzscaling is a strategy and set of techniques for driving and managing extremely rapid growth that prioritize speed over efficiency in an environment of uncertainty. Put another way, it’s an accelerant that allows your company to grow at a furious pace that knocks the competition out of the water. Blitzscaling requires hypergrowth but goes beyond the blunt strategy of “get big fast” because it involves purposefully and intentionally doing things that don’t make sense according to traditional business thinking.
Disruption on its own is neither good nor bad, but it always involves change. Replacing a $10 product with a $1 product of equal or better quality looks like a disaster to an incumbent player, but, for society as a whole, it means greater productivity. The buyer gets the desired product, and now also has $9 available to invest in other things. Netflix has been bad news for broadcast and cable networks, but it has been great news for fans and creators of movies and television. Yes, disruption produces losers as well as winners, but, as a whole, it is a vital source of growth and opportunity that you can’t afford to ignore.
In their book Future Shock, the futurists Alvin and Heidi Toffler wrote that “change is the only constant,” and “to survive, to avert what we have termed future shock, the individual must become infinitely more adaptable and capable than ever before.” Those words were originally published in 1970. The pace of change has only accelerated since then.
The late, great Andy Grove, Intel’s legendary CEO, understood and explained this when he wrote in a 2010 op-ed for Bloomberg: Start-ups are a wonderful thing, but they cannot by themselves increase tech employment. Equally important is what comes after that mythical moment of creation in the garage, as technology goes from prototype to mass production. This is the phase where companies scale up. They work out design details, figure out how to make things affordably, build factories, and hire people by the thousands. Scaling is hard work but necessary to make innovation matter.
The advancing armies in these campaigns abandoned the traditional approach of moving at the slow pace at which they could establish secure lines of supply and retreat. Instead they fully committed to an offensive strategy that accepted the possibility of running out of fuel, provisions, and ammunition, risking potentially disastrous defeat in order to maximize speed and surprise. The speed of these armies’ advance shocked and overwhelmed their opponents, allowing the blitzkriegers to outmaneuver and outfight the defending forces.
When a market is up for grabs, the risk isn’t inefficiency—the risk is playing it too safe. If you win, efficiency isn’t that important; if you lose, efficiency is completely irrelevant. Over the years, many have criticized Amazon for its risky strategy of consuming capital without delivering consistent profits, but Amazon is probably glad that its “inefficiency” helped it win several key markets—online retail, ebooks, and cloud computing, to name just a few.
These methods focused on achieving efficiency and certainty, and the same emphasis was reflected in the broader business world. The world’s most valuable company during that time, General Electric, was beloved by Wall Street analysts for its ability to deliver consistent and predictable earnings growth. But efficiency and certainty, while innately appealing, and very important in the context of a stable, established market, offer little guidance to the disrupters, inventors, and innovators of the world.
When you blitzscale, you deliberately make decisions and commit to them even though your confidence level is substantially lower than 100 percent. You accept the risk of making the wrong decision and willingly pay the cost of significant operating inefficiencies in exchange for the ability to move faster. These risks and costs are acceptable because the risk and cost of being too slow is even greater. But blitzscaling is more than just plunging ahead blindly in an effort to “get big fast” to win the market. To mitigate the downside of the risks you take, you should try to focus them—line them up with a small number of hypotheses about how your business will develop so that you can more easily understand and monitor what drives your success or failure. You
Yet despite all of these potential pitfalls, blitzscaling remains a powerful tool for entrepreneurs and other business leaders. If you’re willing to accept the risks of blitzscaling when others aren’t, you’ll be able to move faster than they will. If the prize to be won is big enough, and the competition to win it is intense enough, blitzscaling becomes a rational, even optimal strategy.
In the physical sciences, materials often undergo phase changes as their circumstances (e.g., temperature and pressure) change. Ice melts into water; water boils into steam. As a start-up scales up from one phase to the next, it undergoes fundamental changes as well. And in the same way that ice skates are useless on water, and you can’t skip rocks on water vapor, the approaches and processes that worked for one phase break down once the scale-up reaches the next phase.
The first technique of blitzscaling is to design an innovative business model that can truly grow. This sounds like a Start-ups 101–level insight, but it’s astounding how many founders miss this key element. A major mistake made by many start-ups around the world is focusing on the technology, the software, the product, and the design, but neglecting to ever figure out the business. And by “business” we simply mean how the company makes money by acquiring and serving its customers. In contrast, despite the popular “engineers are gods” narrative prevalent in Silicon Valley, the companies and founders we universally hail as geniuses aren’t just technology nerds—they’re almost always business nerds too. At Google, Larry Page and Sergey Brin built great search algorithms, but it was their innovations to the search engine business model—specifically, considering relevance and performance when displaying advertisements rather than simply renting space to the highest bidder—that drove their massive success.
Business model innovation is how start-ups are able to outcompete established competitors who typically hold a host of advantages over any upstarts. As a start-up, Dropbox competes with giants like Microsoft and Google, who ought to have major advantages in technology, finance, and market power. Dropbox founder and CEO Drew Houston knows that his company can’t simply rely on better technology or outexecuting the competition: “If your playbook is the same as your competitor’s, you are in trouble, because chances are they are just going to run your playbook with a lot more resources!”
Uber and Airbnb also built large businesses at incredible speed based on novel business models rather than unprecedented new technologies. If technological innovation alone were enough, federal research labs would produce $100 billion companies on a regular basis. Spoiler alert: they don’t.
Ideally, you design your business model innovation before you start your company. This is what happened when I cofounded LinkedIn. The key business model innovations for LinkedIn, including the two-way nature of the relationships and filling professionals’ need for a business-oriented online identity, didn’t just happen organically. They were the result of much thought and reflection, and I drew on the experiences I had when founding SocialNet, one of the first online social networks, nearly a decade before the creation of LinkedIn.
It may be risky to bet the company, as Walt Disney did when he borrowed against his own life insurance to build Disneyland, but it’s not blitzscaling. Blitzscaling would have involved inefficiencies like paying construction crews to work twenty-four hours a day in order to get Disneyland open a few months earlier, or reducing ticket prices 90 percent to get to one million visitors faster—knowing that those one million visitors were networked to ten million more.
This mindset can be difficult for people to understand. “Why should I risk it all and potentially blow up what is a successful, growing business?” they might rightfully ask. The answer is that blitzscaling businesses tend to play in winner-take-most or winner-take-all markets. The greater risk for a successful, growing business is to move too slowly and allow its competitors to win market leadership and first-scaler advantage.
Great companies and great businesses often seem to be bad ideas when they first appear because business model innovations—by their very definition—can’t point to a proven business model to demonstrate why they’ll work.
Then there’s Brian Chesky of Airbnb, who said simply, “Build a product people love. Hire amazing people. What else is there to do? Everything else is fake work.”
For the purposes of this book, we’ll focus on the basic definition: a company’s business model describes how it generates financial returns by producing, selling, and supporting its products.
As Aaron Levie, the founder of the online file storage company Box noted in a tweet in 2014, “Sizing the market for a disruptor based on an incumbent’s market is like sizing a car industry off how many horses there were in 1910.”
This means that it’s not necessarily any easier to sell a low-margin product than a high-margin product. If possible then, a company should design a high-gross-margin business model.
The S-curve of innovation argues that the rate of adoption of every innovation eventually slows as the market saturates. However, companies like Apple have mastered the strategy of investing in new products that let them hop onto additional S-curves. Apple hopped from music players to smartphones to tablets, and it is no doubt spending some of its vast profits chasing the next S-curve. The premium that the public markets grant these companies also helps them use mergers and acquisitions (M&A) to jump these curves, much as Facebook did with Instagram, WhatsApp, and Oculus, and Google did with DeepMind.
On his industrial organization of information technology website, the NYU professor Arun Sundararajan classifies network effects into five broad categories: Direct Network Effects: Increases in usage lead to direct increases in value. (Examples: Facebook, messaging apps like WeChat and WhatsApp) Indirect Network Effects: Increases in usage encourage consumption of complementary goods, which increases the value of the original product. (Example: Adoption of an operating system such as Microsoft Windows, iOS, or Android encourages third-party software developers to build applications, increasing the value of the platform.) Two-Sided Network Effects: Increases in usage by one set of users increases the value to a different set of complementary users, and vice versa. (Example: Marketplaces such as eBay, Uber, and Airbnb) Local Network Effects: Increases in usage by a small subset of users increases the value for a connected user. (Example: Back in the days of metered calls, certain wireless carriers allowed subscribers to specify a limited number of “favorites” whose calls didn’t count against the monthly allotment of call minutes.) Compatibility and Standards: The use of one technology product encourages the use of compatible products. (Example: within the Microsoft Office suite, Word’s dominance meant that its document file format became the standard; this has allowed it to destroy competitors like WordPerfect and fend off open-source solutions like OpenDocument.)
“The Only Thing That Matters.” In his essay, Andreessen argues that the most important factor in successful start-ups is the combination of market and product. His definition couldn’t be simpler: “Product/market fit means being in a good market with a product that can satisfy that market.”
You see a surprising number of really well-run start-ups that have all aspects of operations completely buttoned down, HR policies in place, great sales model, thoroughly thought-through marketing plan, great interview processes, outstanding catered food, 30" monitors for all the programmers, top tier VCs on the board—heading straight off a cliff due to not ever finding product/market fit.
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. It’s usually difficult to find such an opportunity in a “hot” space; if an opportunity is obvious to everyone, the chance that you’ll be the one who succeeds is exceedingly low.
Most nonobvious opportunities arise from a change in the market that the incumbents aren’t willing or able to adapt to.
As Airbnb grew, the strategy shifted from the founders managing a short list of photographers, to an employee managing a large group of photographers, to an automated system managing a global network of photographers. Founder Brian Chesky describes this strategy succinctly: “Do everything by hand until it’s too painful, then automate it.”
In 2014, its first year of operation, LINE’s sticker business generated $75 million in revenue. That figure grew to $270 million in 2015, which represented over a quarter of LINE’s total revenues. Not bad for an intangible product with no intrinsic value! Digital goods have also become a key business model in the video game industry, with in-game purchases of digital items that can help players advance in the game or advertise their status. Market-wide revenue from in-app purchases are projected to outstrip paid-app downloads in 2017, $37 billion to $29 billion. In addition to enjoying the advantages of any bits-based business, digital goods tend to have nearly 100 percent gross margins, since they are purely digital and usually do not add significantly to infrastructure or overhead costs.
And all this came about because Hastings had the insight and persistence to wait nearly a decade for Moore’s Law to turn his long-term vision from an impossible pipe dream into one of the most successful media companies in history. Moore’s Law has worked its magic many other times, enabling new technologies ranging from computer animation (Pixar) to online file storage (Dropbox) to smartphones (Apple). Each of those technologies followed the same path from pipe dream to world-conquering reality, all driven by Gordon Moore’s 1965 insight.
Whenever I interview someone for a job, I like to ask this question: “What important truth do very few people agree with you on?” This question sounds easy because it’s straightforward. Actually, it’s very hard to answer. It’s intellectually difficult because the knowledge that everyone is taught in school is by definition agreed upon. And it’s psychologically difficult because anyone trying to answer must say something she knows to be unpopular. Brilliant thinking is rare, but courage is in even shorter supply than genius.
Being contrarian is often critical to the process of creating a massively valuable technology company. As we’ve discussed, key growth factors like distribution and network effects tend to provide disproportionate rewards to a company that is the first in its space to achieve critical scale. Being contrarian and right gives you a huge advantage because you get a head start on achieving scale.
If your company is pursuing an opportunity that nearly everyone agrees is very attractive, you’re likely to have a difficult time distancing yourself from your army of competitors. But if your company is pursuing an opportunity that conventional wisdom ignores or disdains, you will probably have the time you need to refine your business model innovation into a well-oiled machine.
Many venture capitalists like to brag that they are masters of “pattern matching”—but here we must caution not all pattern matching is helpful. The bad kind of pattern matching is what B- and C-grade investors love—the Hollywood high-concept pitch. The movie Speed was famous for its high-concept pitch: “Die Hard on a bus.” And if you’re the first person to make the connection, you might succeed. Speed was in fact a commercial success, mostly because it did in fact live up to its description. But the success of Speed led to a raft of derivative and inferior movies, ranging from Steven Seagal’s Under Siege (“Die Hard on a ship”) to Steven Seagal’s Executive Decision (“Die Hard on a plane”). When an investor funds “Uber for Pets,” that’s bad pattern matching.
The problem is that, by definition, business model innovation involves trying something that is new, and thus unproven!
Our “Merlin” tool helped make our salespeople more productive (and thus scalable) by automating much of their manual work. Merlin would analyze usage patterns and tell each salesperson which companies to call, how they were already using LinkedIn, and even create a personalized sales deck for each individual prospect!
Remember, the objective of blitzscaling is to achieve “lightning” growth despite the increased risks and costs. The only time that it makes sense to blitzscale is when (whether for offensive or defensive reasons) you have determined that speed into the market is the critical strategy to achieve massive outcomes. You don’t necessarily need to have solved your revenue model before deciding to blitzscale. In fact, a key element of blitzscaling is often the willingness of investors to fund growth before the revenue model is proven—after all, it’s pretty easy to fund growth after the revenue model is proven.
You’re also adding qualitatively different kinds of people to the team. One metaphor I use to explain this shift is to take yet another analogy from military history: the marines take the beach, the army takes the country, and the police govern the country. Marines are start-up people who are used to dealing with chaos and improvising solutions on the spot. Army soldiers are scale-up people, who know how to rapidly seize and secure territory once your forces make it off the beach. And police officers are stability people, whose job is to sustain rather than disrupt. The marines and the army can usually work together, and the army and the police can usually work together, but the marines and the police rarely work well together. As you blitzscale, you may need to find new beaches for your marines to take rather than ask them to help patrol the existing ones.
When Selina Tobaccowala joined SurveyMonkey in 2009, she had to build up the company’s data infrastructure quickly. “There were no analytics before 2009,” Selina told our Blitzscaling class at Stanford. “There was a daily cash report and that was it. I strongly believe that as a whole company, you can’t get behind more than three to five metrics. The key metrics we picked were free users, free users that become paid users, and then user engagement metrics—number of surveys, and return rate.”
Sometimes even a single metric can tell you a lot. At YouTube, Shishir Mehrotra decided that their single clarifying metric would be watch time. “Our goal was to get to one billion hours per day of watch time,” he said. “At the time, we were doing 100 million hours per day. Facebook had about double that. Television as a whole was 5.5 billion hours per day….Picking a single clarifying metric is very hard, but it clarifies decision-making and what constitutes success.”
Watch out for what Eric Ries dubbed “vanity metrics”—numbers that present a rosy picture of the business but don’t actually reflect its key drivers of growth. Note that one company’s vanity metric might be another’s key driver. For example, pageviews are a vanity metric for most start-ups, but the key driver for a media company. In an interview for Reid’s Masters of Scale podcast, Ev Williams, founder of Blogger, Twitter, and Medium, reported that in the early days of Twitter, his team got caught up in a particularly harmful vanity metric. Twitter was being praised in the press for encouraging developers to build on top of its API, and Ev’s team celebrated the rapid rise in the volume of API calls Twitter was handling each day. Unfortunately, they discovered that API call volume didn’t actually correlate with business success. In fact, the opposite was true; the large number of API calls were overwhelming Twitter’s infrastructure and causing scalability and performance issues. “We discovered that a lot of the developers who built on top of our API were very inefficient,” he recalled. “There was one Mexican radio station that had a particularly bad JavaScript on their Web page—just that one Web page was bringing us down!” Twitter had to tighten its API access rules to reduce the call volume.
In contrast, Apple’s highly centralized approach allows it to produce highly integrated and polished products, but, as a result, it restricts itself to a much smaller product line. Of course, this is intentional; Steve Jobs always wanted to run as close to single-threaded as possible to maintain Apple’s unity of purpose. One of the first things Steve did when he returned to Apple as CEO in 1997 was to reduce the company’s product line from dozens to a simple two-by-two matrix: consumer desktop, pro desktop, consumer laptop, and pro laptop. “Deciding what not to do is as important as deciding what to do,” he told his biographer Walter Isaacson. Another famous Steve story involves an Apple strategy off-site where Apple’s top one hundred people worked for a day to reduce Apple’s strategy to ten key priorities, at which point Steve crossed off the bottom seven items and said, “We can only do three.”
“The way I do it, it doesn’t feel big,” [Kalanick] says, falling back on a favorite trope: that he approaches his day as a series of problems to be solved….“I would say you constantly want to make your company feel small,” he says. “You need to create mechanisms and cultural values so that you feel as small as possible. That’s how you stay innovative and fast. But how you do that at different sizes is different. Like when you’re super small, you go fast by just tribal knowledge. But if you did tribal knowledge when you’re super big it would be chaotic and you’d actually go really slow. So you have to constantly find that line between order and chaos.”
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. The ideal is a tight OODA loop—observe, orient, decide, act—over and over again. Speed really matters, and launching early lets you climb the learning curve to a great product faster. Mark Zuckerberg credits speed for the success of Facebook. In an interview for Reid’s Masters of Scale podcast, Mark told us, “Learn and go as quickly as you can. Even if not every single release is perfect, I think you’re going to end up doing better over a year or two than you would be if you just waited a year to get feedback on all of your ideas. That focus on learning quickly is the focus of the company.”
I often tell entrepreneurs that starting a company is like jumping off a cliff and assembling an airplane on the way down. The default outcome for any start-up is death, which means that you have to move quickly and decisively to avoid that default outcome at all costs. That doesn’t leave a lot of time for dotting each i or crossing each t.
The fact is, most entrepreneurs are far more likely to raise too little rather than too much money. Nobel Prize–winning economist Daniel Kahneman and his longtime collaborator, the late Amos Tversky, described this general phenomenon when they wrote about the “planning fallacy” in their 1979 paper “Intuitive Prediction: Biases and Corrective Procedures.” The planning fallacy is that you make a plan, which is usually a best-case scenario. Then you assume that the outcome will follow your plan, even when you should know better.
Nearly all founders, business gurus, and academics agree that organizational culture is important. While there are a lot of inefficiencies you can tolerate and fires you can let burn during your blitzscaling journey, ignoring your culture is not an option. Brian Chesky of Airbnb defines culture in a simple and concise way: “a shared way of doing things.” Clearly defining the way an organization does things matters, because blitzscaling requires aggressive, focused action, and unclear, hazy cultures get in the way of actually implementing strategy.
The two key levers of deliberate cultural transmission are communications and people management. Communications are important because they provide founders with a direct channel to all employees. This can take many forms, ranging from formal in-person meetings to electronic communications to things as seemingly neutral as office layout and design. Airbnb, for example, employs a wide range of channels to maximize cultural transmission. The weekly e-mail cofounder Brian Chesky sends to all Airbnb employees is a powerful one. “You have to continue to repeat things” Brian told our class at Stanford. “Culture is about repeating, over and over again, the things that really matter for your company.” Airbnb reinforces these verbal messages with visual impact as well.
China has been one of the world’s fastest-growing economies for decades, and PricewaterhouseCoopers projects that China’s economy will overtake that of the United States in size by 2030. In many areas, it already has. In 2016, the volume of mobile payments in China was $8.6 trillion. In comparison, the same figure for the United States was $112 billion. In other words, China’s mobile payments market was nearly seventy-seven times that of the United States. Didi Chuxing provides twenty million rides per day in China, over triple the volume of Uber worldwide. These factors give China a major advantage over almost every other ecosystem when it comes to the growth factor of market size.
As founders, investors, and authors, we have a personal, in-depth familiarity with the Silicon Valley way; in contrast, our knowledge of China is necessarily that of outsiders. Yet we can’t help but be struck by how many valuable lessons these two ecosystems can learn from each other. For example, China’s speed demonstrates the value of intense competition as a motivator. On one occasion, Xiaomi’s Lei Jun told me, “You American entrepreneurs are lazy. The vast majority of my company is still working at nine o’clock on a Saturday night.” In some ways, he’s right. Chinese blitzscalers work with an intensity that few in Silicon Valley can match.
Rather than staying open during the standard American business hours of 9 a.m. to 5 p.m., Xiaomi operates on a “996” model—get in at 9 a.m., leave the office at 9 p.m., and work six days a week. I saw the same thing at LinkedIn China. To make a tight deadline for our “Red Horse” project, our China team leader Derek Shen simply moved the entire development team to a hotel for two weeks so that its members could work around the clock without any of the distractions of normal life.
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. Eight of the ten wealthiest self-made women in the world are Chinese.
Uncertainty by itself isn’t risk; it simply produces unknowns, and unknowns aren’t inherently negative. As anyone who has ever read a mystery novel or traveled to a new city or learned a new language can attest, one of the great joys of life is the journey of discovery, of turning the unknown into the known. However, when you combine uncertainty with the possibility of a negative outcome, you produce risk. The magnitude of the risk is a function of the probability, and severity, of that potential negative outcome. Blitzscaling always involves risks, but all risks aren’t equal. This is why you need to distinguish between systemic and nonsystemic risk.
Nonsystemic risk is localized and, at most, affects a part of the system. Systemic risk can impact or even destroy the entire system, either directly or as the result of cascading problems.
For example, the possibility of nuclear war is a clear example of systemic—even extinction-level—risk. Even if we don’t believe that we can eliminate this risk entirely, the magnitude of the risk makes it worth expending a great deal of effort to reduce the probability that it occurs.
The systemic/nonsystemic distinction is dynamic, not static, and blitzscalers should be prepared to change their approach accordingly.
When you are facing an unknown/nonsystemic risk, it may not even be worth expending the effort to analyze it—it’s probably a small fire that you should let burn.
As the company achieves success and grows into the Village stage, it’s time to ask yourself, “What things, if I don’t fix them now, will be functionally impossible to fix at scale?” It’s especially difficult to find the balance between morality and velocity during this stage, because the company is probably firing on all cylinders and pursuing all-out lightning-fast growth, and if you pause or slow down to fix things, a competitor might grab the first-scaler advantage from right under your nose. That’s why the question asks what is “impossible,” not just what is “difficult.”
Speed and uncertainty are the new stability. The only way to thrive in this fast-changing world is to accept the inevitability of change. Use it to your advantage, whether you’re focused on your individual life or the fate of a nation.
As new technologies and trends emerge, the uncertainty of where they are headed will paralyze many people and keep them from acting. Those who are willing to act—and act quickly—despite the uncertainty will have a disproportionate advantage. Seek out blitzscaling companies and markets; that’s where you’ll find the greatest growth and opportunity.
We believe that the future can and should be better than the past, and that it’s worth tolerating the discomfort we feel when blitzscaling to get to the future as quickly as we can.