By Tian DuBelko
LinkedIn co-founder Reid Hoffman says that speed is the trait that all successful startups share.
Hoff, who became Microsoft’s newest board member in March, joined tech entrepreneur and Angel Investor Sarah Imbach for a tech-focused conversation at the Tech Alliance annual State of Technology lunch in Seattle. At the discussion, Hoffman talked about the importance of startups using speed to their advantage, a tactic he encourages his own companies to explore.
In addition, Hoffman shared some tactics that he had learned through Microsoft and planned to apply to his own companies. Hoff had been spending time in Seattle as a startup investor, and his investments include Seattle-based Convoy, which recently shared the stage with billionaire Richard Branson.
What is Blitzscaling?
In particular, Hoff stressed the importance of companies to scale fast. He said that harnessing speed as a weapon is something that successful Silicon Valley companies are doing.
Hoff uses the term, ‘blitzscaling,’ which he defines as deploying “what seems like a ridiculous amount of capital quickly in order to scale your customer acquisition, your organization, and your market size … in a way that would generally be considered inefficient by like a classic MBA class.”
Uber and Airbnb were cited by Hoff as classic blitzscalers. And while a company can survive without blitzscaling, Hoff said it would take some luck.
Speed as an Asset
As the tech world becomes increasingly more competitive, Hoff thinks companies now, more than ever, can use speed to their advantage. And the reason for that, Hoff said, is because “You want to realize a market opportunity where being the first to scale is the critical thing in order to win.”
On Silicon Valley companies, Hoff said, “There is no modern Silicon Valley company that doesn’t actually, in fact, have kind of these speed genetics built in.”
(Reid Hoffman via Twitter)
With ambitious startups looking to incorporate blitzscaling into their overall growth strategy, it becomes harder for non-blitzscalers to compete, “because someone can raise a bunch of capital and deploy it to advance their position,” Hoff said. “They may be wrong and that great market opportunity is not there, but they’re certainly going to throw a huge shadow on your efforts.”
You can watch what Hoff had to say on blitzscaling and entrepreneurship here:
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