Not every startup need burn ridiculous amounts of cash to get as big as possible as quickly as possible. But some should, and Reid Hoffman explains exactly how to identify them.
Reid is the founder of LinkedIn, a venture capital investor at Sequoia, and a former early employee at PayPal. He knows a thing or two about the topic of scaling.
The book argues that for startups that operate in winner-take-all or winner-take-most markets, the need to grow quickly to capture market share far outweighs the need to operate a business efficiently. The trade off is to optimize for speed to market and growth at the expense of financial and operational efficiency, because absent winning the market there’s no hope for the business.
This is not a book of hypothetical musings. It’s actionable advice based on real examples of companies that “blitzscaled” to win sustainable competitive advantages – most often based on network effects that create customer lock-in and competitor barriers to entry.
Read this book to understand the mentality of venture capital fueled businesses, the stakes they play for, and maybe most importantly the conditions required for this path to make sense. Most businesses should not take this path!