Blitzscaling - Reid Hoffman  ## Metadata - Author: **Reid Hoffman** - Full Title: Blitzscaling - Category: #books - Tags: #business ## Highlights - Not every generalist can or even wants to become a specialist. ([View Highlight](https://read.readwise.io/read/01gn6g4de131n5b5gndhmejqec)) - In many cases, you should work to retain your generalists, both for their cultural and institutional knowledge, and for their ability to tackle new problems ([View Highlight](https://read.readwise.io/read/01gn6g52w8h06sx0nwgq81yd9c)) - In the Family stage, you should hire only generalists ([View Highlight](https://read.readwise.io/read/01gn6g5nndtgqm23bxhdc2frat)) - The Village stage is where it becomes prudent to hire specialists, as both executives and key contributors ([View Highlight](https://read.readwise.io/read/01gn6g73x641rb982j7t7y747d)) - At the Tribe stage you want employees with skill sets flexible enough to pivot along with the company, but if you have hundreds of employees, you better have some pretty well-developed theories about your business and where it is going! Almost any executive hire at the City or Nation stage is going to be a specialist. But even at these largest, latest stages, you should still mix in some number of generalists. ([View Highlight](https://read.readwise.io/read/01gn6g8djpdg3jmprfpbsm979d)) - We believe that managers and executives play very different roles. Most of the confusion probably comes from the tendency in early-stage start-ups for the same person to play the role of manager and executive. These are separate roles, even when the same person plays them. ([View Highlight](https://read.readwise.io/read/01gn6gady2jxvae9g45whf6hxt)) - Another helpful strategy for hiring outside executives is to be strategic about how you blend those outside hires with inside promotions ([View Highlight](https://read.readwise.io/read/01gn6hqwq5taxf4yecfdwxk7mt)) - *Bring the new executive in at a lower level initially and let the executive prove himself or herself*. ([View Highlight](https://read.readwise.io/read/01gn93bq83rcz09w21c87gr9nf)) - As your company progresses from a Village to a City or even a Nation, you’ll continue to need to hire executives, both because the growth in size will require you to add layers above your frontline managers, and because your executives won’t always have what it takes to scale to the next stage. But once your organization has successful executives who can serve as role models and mentors, you will be able to start promoting promising managers with personal experience working with those successful executives from within ([View Highlight](https://read.readwise.io/read/01gn93cs344zz6c4eypxnrvs0r)) - While entrepreneurs often resist creating a hierarchy by classifying their people into executives, managers, and contributors, this kind of formal structure is essential to growth ([View Highlight](https://read.readwise.io/read/01gn93dr2gsq7vjdd3gpzre1wa)) - When launching their start-ups, many founders eschew hierarchy because of their egalitarian ideals. But as their firms scale, a growing number of people report to a handful of leaders. Founders may think this allows them to remain in command, because all decisions pass through them. But ironically, their organizations spin out of control as centralized authority becomes a bottleneck that hinders information flow, decision making, and execution. A couple of people at the top can’t effectively supervise everyone’s increasingly specialized day-to-day work; in such a system, accountability for organizational goals gets lost ([View Highlight](https://read.readwise.io/read/01gn93epfxd43gmr4ek0fq80jb)) - As the company grows, you have to shift from informal, in-person, individual conversations to formal, electronic, “push” broadcasting and online “pull” resources. You also have to shift from sharing all information by default to deciding on what is secret and what is shareable. If you don’t manage to develop an effective internal communications strategy, your organization will become disjointed and start to fall apart ([View Highlight](https://read.readwise.io/read/01gn93wmem2g5bsrfb0m5m42js)) - However, as early as the Tribe stage, you will need to begin implementing processes to supplement the one-to-one dialogue. For example, nearly every Tribe-size start-up holds a weekly company meeting, though with wildly varying degrees of effectiveness. The weekly meeting is most effective when it serves as a mechanism to bring together the entire company, and for company leaders to convey key messages to employees with whom they don’t work directly. ([View Highlight](https://read.readwise.io/read/01gn94fbkyzjctpgvzqfcmjx6k)) - A Tribal meeting should be well organized, with an agenda and other materials provided in advance so that participants can engage in an interactive discussion rather than simply listen to senior leaders talking or, worse, suffer through text-dense PowerPoint presentations. ([View Highlight](https://read.readwise.io/read/01gn94fqtt2b4sxfrqr7w7penq)) - The best Tribal meetings include rituals that go beyond the cut-and-dried business of the company and help the employees get to know one another better as people, not just workers ([View Highlight](https://read.readwise.io/read/01gnbs2an56pmtbqhwg076s64p)) - For example, one rapidly growing start-up that Chris was involved with reserved a portion of each company meeting for one employee to give a “get to know me” presentation ([View Highlight](https://read.readwise.io/read/01gnbs2xb08m86rhravfmhh6kr)) - The all-hands needs to have a formal questions period so that employees can request needed information and feel part of the decision-making process ([View Highlight](https://read.readwise.io/read/01gnbsazh138xvkz4kv2p7zbqq)) - Of course, at the Village stage, the company likely exceeds Dunbar’s number (the number of individuals with whom any one person can maintain stable relationships), and the founder simply won’t have time to meet one on one with every employee with any reasonable frequency ([View Highlight](https://read.readwise.io/read/01gnbsehyw8251exxmmws6az8s)) - The big change is the need for formal, explicit, broadcast communication. It feels unnatural, especially for me for some reason. Part of the way to rationalize it is to realize that a start-up is not a natural environment. The optimal things to do don’t always feel natural. The social groups you belong to don’t typically grow 100 percent per year. The new people weren’t there for all the tortured discussions of the past. That can be good, but they also don’t have the context, so it is a delicate balancing act. ([View Highlight](https://read.readwise.io/read/01gnbspk0dhtad1cp1rs5wmgkv)) - 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.” ([View Highlight](https://read.readwise.io/read/01gnbtfp4af6vqyg47yvyxhrn9)) - The key stats will evolve as your company grows. You can’t simply “set it and forget it” when it comes to data. The critical metrics for predicting the long-term viability of your business may be very different as you achieve scale, particularly if the environment is changing rapidly. For that matter, your definition of “long-term” will change a great deal. In the Family stage, next month often counts as “long-term,” whereas a Nation-stage company might have multiyear plans. At LinkedIn, we began with a laser focus on the number of user registrations as our key stat, but the long-term engagement of our users and a number of other stats are more important today. ([View Highlight](https://read.readwise.io/read/01gnbtk7bn0xs594fenwpjkdqk)) - Once the company has more than a thousand employees, the organization is large enough to support the creation of multiple divisions or business units. While moving to a decentralized organization makes it harder to coordinate the different divisions or business units, the key motivation for the change is how it allows each group to focus on its specific thread ([View Highlight](https://read.readwise.io/read/01gnbtq7y862a0fabry04n2b4b)) - You’ve got to keep your personal learning curve ahead of the company’s growth curve ([View Highlight](https://read.readwise.io/read/01gnbtsvv1q2nhrtdej9rbd3cy)) - One of the most important aspects of delegation, and often the most challenging for a founder, is to hire an executive and hand off functional leadership. For example, a lot of great founders are product people. Initial product/market fit and success are achieved because of their product instincts. But as the company grows, these founders will almost always need to hire an executive to take over leadership of the product organization—it’s too important to be a founder’s part-time job. ([View Highlight](https://read.readwise.io/read/01gnbtv5ve4rsfgjhx94chrd82)) - This means talking with other smart people, often, so that you can learn from their successes and failures. It’s usually easier and less painful to learn from another’s mistakes than from your own. When I need to learn about a new subject, I’ll definitely devour some books on the topic, but I almost always supplement this reading by seeking out dialogue with leading experts in the field. Brian Chesky at Airbnb, another amazing learning machine, does something similar, seeking advice from mentors like Sheryl Sandberg and Warren Buffett. Brian told our class at Stanford, “If you find the right source, you don’t have to read everything. I’ve had to learn to seek out the experts. I wanted to learn about safety, so I went to George Tenet, the ex-head of the CIA. Even if you can’t meet the best, you can read about the best.” Brian lives this advice; he got many of his ideas by assiduously poring over biographies of great entrepreneurs like Walt Disney. ([View Highlight](https://read.readwise.io/read/01gne9ahjw98zew6x6qc1v7wed)) - 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. ([View Highlight](https://read.readwise.io/read/01gne9b7v9j1ms9e1hkmzzqfy2)) - If you’re serious about someday blitzscaling a company, you should think of your mentors as a board of directors. Regularly report to them on your progress, and ask them how you can do better. Everyone needs feedback ([View Highlight](https://read.readwise.io/read/01gne9dcfjgehq2ax7y8f5b4ma)) - He and I have a scheduled dinner every month where (among other things) we share what we’ve learned and provide feedback ([View Highlight](https://read.readwise.io/read/01gne9dzsp0wqv2ayw8tctk5sr)) - Entrepreneurs should always have a Plan A, a Plan B, and a Plan Z. ([View Highlight](https://read.readwise.io/read/01gne9mp3gfz326jnhbyk65j77)) - The Darwinian competition is so fierce that your organization needs to be “all in” on the current stage of scaling. You need managers and executives who are “just right” for the current phase of growth; after all, you won’t have to worry about that next phase if your team can’t actually get you there. ([View Highlight](https://read.readwise.io/read/01gne9sr48nt2qncb7ychxkz6b)) - We did a few good things, such as making sure that every employee had a clear primary job and staying focused when working on certain important projects, but for the most part PayPal’s management was a lack of management. There were no one-on-one career development conversations with employees. There was no work done to form teams beyond simply picking who was going to belong to them. The few rules we had were more about individual incentives rather than team management. For example, when people were late to a meeting, the last person to arrive was fined $100 to enforce discipline. Yet while we knew meetings were important, we didn’t designate a note taker to capture key points and action items, a common and basic practice in Silicon Valley. ([View Highlight](https://read.readwise.io/read/01gne9vp0erj8f9edwc5y6sh5v)) - Classic “good” management and planning presume a certain amount of stability that isn’t always available when you’re blitzscaling. One of the misconceptions of entrepreneurship is that you work out a plan and then execute it. Think of the embedded metaphor in “building” a business—the very language suggests that you’re following an architectural plan. But when you’re creating and scaling an innovative business model, you often don’t have any detailed blueprints. Instead, it’s more like “I think a building over there would be a good idea. Let’s start digging!” Then once the cement is poured and the walls go up you realize, “It should be a hotel, and therefore we need to do this kind of a floor plan.” ([View Highlight](https://read.readwise.io/read/01gne9x25eebrg8g6ppcvyyrza)) - Tags: #management - 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.” ([View Highlight](https://read.readwise.io/read/01gnea1c4p5jg1ear1g2c094ks)) - I learned this lesson the hard way when I was running my first start-up, SocialNet. I didn’t want to be embarrassed by our first release, so the approach we took was to complete the entire product before we pulled back the curtain and let people sign up. This approach delayed SocialNet’s launch by a year, and when we finally did launch, we quickly realized that half of the features we’d painstakingly implemented weren’t important, and half of the important things that our service would be useless without were missing because we hadn’t thought of them. While there were other reasons why SocialNet failed, not launching early and iterating based on market feedback was probably the main cause of death. ([View Highlight](https://read.readwise.io/read/01gnea25bsnypzc26854sbcgqt)) - Keep in mind that you should be *embarrassed* by your initial release—not ashamed or indicted! The desire for speed is not an excuse to cut dangerous corners. If you trigger lawsuits or burn through your money without learning, it means you *did* launch too soon. The point of launching your product early is to learn as quickly as possible. But your learning is useless if you don’t have the ability to iterate. If your product bursts into flames and kills someone, you probably won’t get another chance. ([View Highlight](https://read.readwise.io/read/01gneab7adsab271mvff13w18q)) - A free consumer product can get away with the most flaws, because consumers tend to be very tolerant when it comes to something that doesn’t cost them anything. ([View Highlight](https://read.readwise.io/read/01gneahb3ca1z81eqhfrstegqc)) - A free enterprise product needs to be more refined; even if it is free, the stakes are higher in a professional setting. ([View Highlight](https://read.readwise.io/read/01gneahhefqf2nzgrq4vrwj8m8)) - A paid enterprise product needs to be even more refined, but it can still have significant flaws, because these types of products are intended for expert users who may have no choice but to use the product. ([View Highlight](https://read.readwise.io/read/01gneahmk591v085xpathrjj8m)) - A paid consumer product has the least room for error. While consumers are very tolerant of flaws in free products, they expect products they pay for to be nearly perfect and will grouse loudly about any significant flaws they find: “What am I paying for here?” ([View Highlight](https://read.readwise.io/read/01gneaht2gh55nntajcv32g1ve)) - I believe that there is a Maslovian hierarchy of fires that applies to most rapidly growing start-ups, where the top of the list is the most important fire to fight first: • Distribution • Product • Revenue model • Operations • Competition • What’s next? ([View Highlight](https://read.readwise.io/read/01gneakzybt3928jknhhw877c6)) - Many blitzscaling start-ups will offer e-mail support only, or no support at all, relying on users to find and help one another on discussion forums. ([View Highlight](https://read.readwise.io/read/01gneaneb87gwk0q9hjfmxcc6y)) - On an absolute scale, ignoring your customers is rarely going to be a positive. Customers like to feel heard, and ignoring them will eventually deplete your company’s supply of goodwill. But for blitzscaling companies, letting customers feel ignored is often one of the fires that’s easier for you to let burn until you have finished fighting the bigger, more deadly fires. ([View Highlight](https://read.readwise.io/read/01gneany5jykqwzhkw0szadzwc)) - Yet when blitzscaling, you should always raise more—preferably much more—than you need. ([View Highlight](https://read.readwise.io/read/01gneaqp21g6j4vy8nrcv5dvp2)) - Imagine if someone asked a random employee from your start-up the following questions: • What is your organization trying to do? • How are you trying to achieve those goals? • What acceptable risks are you incurring to achieve those goals more quickly? • When you have to trade off certain values, which ones take priority? • What kind of behavior do you hire, promote, or fire for? Would she be able to answer those questions? If you asked another employee, would he give the same answers? When organizations have strong cultures, their employees give consistent answers and act accordingly. ([View Highlight](https://read.readwise.io/read/01gnen05td966n4cmxvpqb4sxh)) - In blitzscaling companies, culture becomes increasingly important—and increasingly difficult to maintain—as the organization grows. In the beginning, the bond that employees form in the early days of the company can be a powerful force in shaping the culture, but this gets more challenging as more people come on board and spontaneous interactions give way to more formalized structures. ([View Highlight](https://read.readwise.io/read/01gngr7he3784vqbrc7ynj7yfh)) - 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. Brian hired an artist from Pixar to create a storyboard of the entire experience of an Airbnb guest, from start to finish, emphasizing the customer-centered design thinking that is a hallmark of its culture. Even Airbnb conference rooms tell a story; each one is a replica of a room that’s available for rent on the service. Every time Airbnb team members hold a meeting in one of those rooms, they are reminded of how guests feel when they stay there. ([View Highlight](https://read.readwise.io/read/01gngrewe47s8s4bpnrhjd454t)) - One of the reasons for evolving your culture is the “Ship of Theseus” paradox. The ancient historian Plutarch coined the term in reference to the ship on which the mythical hero Theseus returned to Athens after slaying the Minotaur. As the legend goes, the Athenians had preserved the famous vessel by replacing broken parts with new wood, until at last none of the original wood remained. Plutarch reported that philosophers argued strenuously, and without resolution, over whether the ship of replacement parts was still the Ship of Theseus ([View Highlight](https://read.readwise.io/read/01gngry0wjp95ammf58br0m64v)) - Blitzscaling companies are particularly susceptible to building a culture that lacks diversity because of their relentless emphasis on speed. The fastest and easiest way to hire is usually to ask employees to refer their friends. But hiring based on homophily (“birds of a feather flock together”) almost inevitably leads to homogeneity. Just as start-ups incur “technical debt” by taking shortcuts with their code, they can incur “diversity debt” by taking shortcuts with their hiring practices. ([View Highlight](https://read.readwise.io/read/01gnkf8n67b0c02c4b600xr8mc)) - In the Tribe and Village stages, the rate at which you are adding employees will require a more systematic approach to diversity. We recommend implementing at least three key policies: First, measure your demographics and make that information transparent and available, both internally and externally. As with any metric, you can’t manage what you don’t measure. Second, institute the equivalent of the National Football League’s Rooney Rule, which requires NFL teams to interview (but not necessarily hire) at least one minority candidate for any senior football operations position. And third, tie at least part of executive compensation to the company’s progress toward its diversity goals. ([View Highlight](https://read.readwise.io/read/01gnkfbwamefc4aywqdxz47mga)) - The incentives that drive individual employees can also have a negative impact on blitzscaling attempts inside an established company. The employee or executive who proposes a risky blitzscaling initiative is the one who stands to gain the most (promotions, bonuses, clout, etc.) from its success. In contrast, other employees gain little from that success, and might even end up losing if that success allows its champion to jump over them for promotions or bonuses. And if the initiative is unsuccessful and costs the company a large sum of money, its employees all bear the cost of failure as well. Is it any wonder that so many bold initiatives are killed in committee? ([View Highlight](https://read.readwise.io/read/01gnkg71ng80znjy7m4wnzppwq)) - A less obvious technique is to **leverage the knowledge of venture capitalists**. Venture capitalists are keen fans of blitzscaling and the returns it brings, even if they didn’t know the specific term before the book came out. If you ask them to become minority investors in your project, they will provide a realistic assessment of your situation. ([View Highlight](https://read.readwise.io/read/01gnkg83xnjb8yzqzmmzft3t5z)) - ne final way to mitigate the inherent pitfalls of blitzscaling within a larger organization is to **treat the new initiative as a company within a company**. Once your blitzscaling project is under way, you will need to manage it differently than your regular projects. ([View Highlight](https://read.readwise.io/read/01gnkg8n4pvx28acwtnb0wj6vc)) - TAKE SHORT-TERM ACTION NOW, BUT DEFER PERMANENT ACTION UNTIL LATER. ([View Highlight](https://read.readwise.io/read/01gnkjkd2x4975wfgt1gaasxgs)) - **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.** ([View Highlight](https://read.readwise.io/read/01gnkkcw81x2end6hmnxg27kb9))