BLITZSCALING  
RESOURCES  
 
 
 
 
 
 
 
 
 
 
 
 
 

1 
 FACTORS OF GROWTH 

Factors driving and  Growth, in general, has both driving and limiting factors 
that define how the company evolves. 
limiting growth   
Factors driving growth in Blitzscaling 
 
● Network effects​ -​ t​ he more we are all connected, 
the more opportunity there is for network effects to 
occur. Network effects happen when each 
additional person on the network increases the 
value of the network for everyone e.g. Facebook. 
● Distribution​ - This is the ability to reach your target 
market. If you are not able to reach your customers 
in a profitable, systematic way, you will never be 
able to scale. You already know viral and sticky 
engines of growth, but you can also grow through 
tapping into an existing distribution channel, 
another network e.g. Paypal’s growth through 
eBay’s distribution network. 
● Big Market​ - how big is your market? Not only the 
market of today, but what it will be in the future e.g. 
Airbnb. When you are creating a new market you 
cannot measure how big the market is today, so 
you should size the problem - how many people 
have that problem? 
● High gross margins​ - unless you have high growth 
margins you will not have the money to fuel your 
growth. 
 
Limiters to Blitzscaling 
 
● Lack of Product-Market Fit​ - even if you have all 
the growth factors in the world, if you don’t reach 
Product-Market Fit, you cannot sustain the business, 
because your growth will be limited.  
● Operational scalability​ - when you start to 
blitzscale, this is not the most important factor. 
However, you have to make sure that your business 
is not unscalable. Once you have reached a certain 
size (which will happen very fast when you 
blitzscale), there are two important factors you 
have to look into: 
○ human limitations​ - your team might grow 3, 
4 or even 10 times overnight. First, they will 
need to learn about your business, and also, 

2 
 you will need to manage much more people 
than before which will completely change the 
organizational structure. We will look into this 
in more detail when we talk about how the 
organization evolves.   
○ infrastructure limitations​ - imagine you have 
the huge demand generated by all the 
growth factors but your current 
infrastructure doesn’t allow you to process all 
of the orders.  
 

 
 
 
 

BLITZSCALING 

What is  “B​litzscaling is prioritizing speed over efficiency in the face 

of uncertainty.” 
blitzscaling?   
It may involve increasing the size of the company by x10 in 
one year or hiring 100 more people when you only have 5. 
Generally speaking, It is a type of growth that you may 
feel very uncomfortable with. BUT, this is the speed you 
need to grow at in order to become a market leader.  
 
Examples:  
● TPMBA hiring 50 sales reps in one week 
● Google made a deal with AOL to power their 
searches, committing to pay more money than they 
had => it brought them 20x more revenues through 
just one deal. 
 

3 
 When to blitzscale?  Not every business in the world is at the right stage to 
blitzscale.  
 
You should Blitzscale when the opportunity is HUGE, 
because:  
● Winner takes all​: when creating a competitive 
advantage quickly, it’s crucial to lock in market 
leadership. Normally it occurs due to network 
effects- the more users that come in, the more 
valuable the business becomes.  
● Unique go-to-market strategy:​ you can reach 
that critical mass point in a really short time 
because you have identified a growth engine 
that allows it. 
 
 

TYPES OF GROWTH STRATEGIES 

 
 

Growth strategies   Blitzscaling is prioritizing speed over efficiency in the 

face of uncertainty. But that is not the only way to 
grow. 
We can define f​ our types of growth​: 
● Classic-startup growth​, which happens before 
we reach the product-market fit 
● Classic Scale-up Growth 
● Fastscaling 
● Blitzscaling  
 
We can categorize them by the level of uncertainty 
and speed. 

 
 
 

4 
 Classic start-up  In the first stage of a startup you have a lot of 
uncertainty, however, you still want to prioritize 
growth  
efficiency over speed. Here you should use Lean 
Startup strategies, since you are still figuring out what 
works, you are experimenting and maybe even 
bootstrapping. You need to find your Product-Market 
Fit and figure out how to scale in the most efficient 
way. When you have all the learnings and your level of 
uncertainty reduces, this is the time to move to Classic 
Scale-Up. 
 
 
 

Classic scale-up  Classic scale-up growth focuses on growing efficiently 

once the company has achieved certainty about its 
growth  
environment. You are growing with the existing 
revenues that you have as you know what works and 
you want to scale efficiently, i.e. you’re optimizing your 
growth (looking for ROI, EBITDA, etc.). 
 
 
 

Fastscaling   Fastscaling means that you’re willing to sacrifice 

efficiency for the sake of increasing your growth rate. 
However, since fastscaling takes place in an 
environment of certainty, the costs are well 
understood and predictable. This is a rare case 
scenario, as when you start growing really fast your 
uncertainty levels increase. 
 
 

Blitzscaling   You are pursuing speed but you are in an uncertain 

environment. The reason you end up in this situation is 
because of the competition, the first one to achieve the 
critical mass will take over the market. You need to 
take risks that others are not willing to take so you can 
get the competitive advantage. 
 
 

5 
  

 
 

HOW THE ORGANIZATION EVOLVES 

 

Stages companies  All companies follow certain patterns as they increase 

in size. 
go through    
Family stage 
The first stage is when the organization starts 
operating with less than 10 people, the early stage of 
the company. It’s very i​ nformal​, everyone is 
participating in everything, you really feel like a family 
as well as a team. This gives you a lot of f​ lexibility​, you 
are learning a lot about the market, you experiment 
and you can pivot from one day to another. 
 
Tribe stage 
In the tribe stage your organization is growing by 
around 10 at a time. It’s still like a family, although not 
as close. It’s slightly more formal and hierarchy, 
departments are starting to be introduced.  
 
Village stage 
Over a hundred employees, a hierarchy is in place and 
you don’t know everyone in the organization anymore. 
Moving to formal culture, processes, procedures that 
are necessary for the growth of the company. 
 

6 
 City stage 
With over 1000 employees, you now have divisions, 
product lines, many individual threads that need to be 
coordinated and managed by the leader. You need to 
make sure everything fits well together. You are 
dealing almost exclusively with the managers of the 
company. 
 
Nation 
In the nation stage, your role as a leader completely 
changes. You have to focus much more on other 
“nation” companies, government, industry, etc. Your 
focus is no longer internal, you have other people who 
are focusing internally, your task is to navigate all 
those external relationships, i.e. foreign policy. 
 

 
 
 

Key transitions   In each of these stages, the role of manager and the 
employees will change: 
 
The founder role: 
1. Family stage - the founder is involved in 
everything and is personally not only planning 
the strategy but also executing, s(he) is pulling 
all the levers of hypergrowth. 
2. Tribe stage - the founder manages the people 
who are pulling the levers. 
3. Village stage - the founder designs an 
organization that pulls the levers, hierarchy 
takes place. 
4. City stage - the founder makes high-level 
decisions about goals and strategies, but is 

7 
 farther away from the day to day operations 
and the employees. 
5. Nation stage - the founder figures out how to 
pull the organization back from blitzscaling and 
manages external relations. 
Early employees role 
Employees' roles change from more generalist roles to 
more specialist roles as the organization evolves, from 
contributors to managers. 
 
Key pitfalls when hiring from the outside: 
● hiring people who are experienced in the highest 
level of scale: You need to make sure you hire 
the people who know how to get you from the 
current to the next stage. 
● the attitude of the executive: they need to learn 
and adapt. A good tip is to hire them for lower 
positions so they can learn and prove 
themselves.  
 
 

9 COUNTERINTUITIVE  
MANAGEMENT PRINCIPLES 
 

Embrace chaos   In the early stages you need to be adaptable as much 

as possible, embracing chaos allows you to quickly 
change direction, much more so than any other 
established company. This is a huge advantage in 
Blitzscaling, e.g. Paypal going through four business 
models and five CEOs in a single year. 
 
 
 

Hire Ms. Right Now  As roles are changing from one stage to another, you 
need to hire people who are able to help you at the 
not Ms. Right  current stage and help you get to the next stage. 
 
 

8 
 Practice “bad  Most management best practices don't make any 
sense in the Blitzscaling context. You need to focus on 
management”   getting things done rather than the process of getting 
things done. 
 
 

Launch a product  As you learned in the Lean Start-up module, the most 
important thing is to launch fast, even if the product 
that embarasses  will embarrass you. This will allow you to get early 
you   feedback from the real customers and design a much 
better product faster.  
 
 

Let fires burn  In the chaotic growth stages, you will see fires burning 
everywhere, so you need to decide which fires are 
essential to put out and let the rest of them burn. It’s 
the art of understanding what is truly important and 
focusing on it. 
 
 

Do things that don’t  The most important thing is to do things quickly and 
gather the learning outcomes. Doing things that don’t 
scale   scale now will allow you to come up with things that 
will scale later, e.g. Airbnb going door to door taking 
photos of the flats (later on they hired photographers 
to do so and were able to scale). 
 
 

Ignore your  There is a difference between your early adopters and 

your mainstream customers. The ones who are using 
customers  
your product/service now are not necessarily the ones 
that will bring you to critical mass. You need to 
understand when to listen to your customers and when 
to ignore them. 
 
 
 

9 
 Raise too much  It’s both a defense and an offense mechanism. It 
means that you’re unlikely to run out of money, but 
money   more importantly, it can give you competitive 
advantage. As the opportunities appear you cannot 
waste time raising money as it may delay you by 
several months (and you might lose the opportunity.) 
 
 

Evolve your culture   Most cultures begin to form organically. The founders 
of the organization have a major influence on the 
culture, simply because of who they are. But each 
employee that comes in should bring new perspectives 
to the culture that will make it even better. 
 
 

 
 
 

10