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Blitzscaling Session 1: Household Stage
The document outlines a course on blitzscaling led by instructors including Allen Blue and Reid Hoffman, focusing on how Silicon Valley startups scale rapidly due to networks and organizational structure. Key themes include the role of founders, evolving business strategies, and the stages of organizational scale. The class will discuss scaling challenges, competition, and critical decisions during growth phases.
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Blitzscaling Session 1: Household Stage
- 1. CS183C: Blitzscaling Instructors: AllenBlue, Reid Hoffman, John Lilly & Chris Yeh September 22, 2015
- 2. Today 1. Introductions 2. Whatyou’ll get out of the class 3. Blitzscaling 4. Class Outline 5. LinkedIn Case Study 6. Organizational Scale 1 7. Prep for Thursday
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- 4. What You Shouldn’tExpect From This Class
- 5. What You’ll GetOut of this Class
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- 9. The mythos ofSilicon Valley is that startups are what make it really special.
- 10. The classic story: •agarage (apartment or dorm room) •technical founders •new product (the app!) •capital •product-market fit: off to races
- 11. That’s partly true. Startupsare critical.
- 12. The problem withthe classic story: now start-ups are abundant In Silicon Valley In the US In many countries — Asia, Europe, Global
- 13. Yet, SV stillproduces many industry transforming companies. So by themselves, startups are not only what makes this place, and this way of doing things, really special.
- 14. Silicon Valley isspecial because it enables companies to get very large, very quickly. Not just to start up, but to scale up.
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- 17. And lately: Flickr: HarloweHeslopCC Sharealike
- 18. Private Unicorns byRegion (via CrunchBase) Bay Area China LA India NYC Europe Elsewhere Top 10 5 2 2 1 % 50% 20% 20% 10% Top 60 28 11 3 4 3 5 6 % 47% 18% 5% 7% 5% 8% 10% Population 7M 1.4B 19M 1.3B 8M 750M lots Uber Xiaomi Airbnb Palantir Didi Kuaidi Snapchat Flipkart SpaceX Pinterest Dropbox
- 19. Private Unicorns byRegion (via CrunchBase) Bay Area China LA India NYC Europe Elsewhere Top 10 5 2 2 1 % 50% 20% 20% 10% Top 60 28 11 3 4 3 5 6 % 47% 18% 5% 7% 5% 8% 10% Population 7M 1.4B 19M 1.3B 8M 750M lots
- 20. Private Unicorns byRegion (via CrunchBase) Bay Area China LA India NYC Europe Elsewhere Top 10 5 2 2 1 % 50% 20% 20% 10% Top 60 28 11 3 4 3 5 6 % 47% 18% 5% 7% 5% 8% 10% Population 7M 1.4B 19M 1.3B 8M 750M lots
- 21. Why the intenseconcentration? Why does it persist?
- 22. Everyone talks aboutscaling.
- 23. What we’re talkingabout is a type of scaling that’s very particular to technology & Silicon Valley startups.
- 24. The special sauceis that scaleups here depend greatly on networks (capital, talent, users, etc) that exist outside the startup itself. The network age: speed, global markets, global competition
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- 26. Themes we’ll talkabout over & over this quarter 1. Networks 2. Positive feedback loops 3. Distribution advantage 4. Organization Scale, Revenue Scale, Customer scale
- 27. Some questions we’lldiscuss this quarter What’s the role of the founder? CEO? Team? Board? How does hiring change as you scale? Who? How? Onboarding? How do you find product-market fit? How do you know? How evolves? How should you think about competition? Other threats? What’re the key decisions & questions you should be asking? When? How should you think about partnerships & business development? How does your strategy change as you grow? How do you think about global — markets, competition, scale? Lots more…
- 28. Class Structure: OrganizationalScale We’ll spend ~2 weeks on each stage. Org Scale (employees) User Scale (B2C users) Customer Scale (B2B) Business Scale (rev) OS1: Family 1s 10,000s 0 <$10M OS2: Tribe 10s 100,000s 1s 10M+ O3: Village 100s 1,000,000s 10s 100M+ OS4: City 1,000s 10,000,000s 100s $1B+ OS5: Nation 10,000s 100,000,00+ 1,000+ $5B+
- 29. Organizational Scale &Functions: part of the grid that we will fill in OS1 OS2 OS3 OS4 OS5 People Product GTM Tech Strategy Operations Finance Hiring Management New Functs We will focus intensely on OS2 and OS3 to OS4
- 30. General observations 1. WhenBlitzscale? (Preparation, Judgment) 2. Generalists to Specialists 3. Doers to Doer-Manager to Managers to Execs 4. Scale and innovation 5. Choice on adaptation vs. operational excellence 6. Global reach 7. Capital requirements 8. Speed is relative - but competition is global 9. Up-market and down-market
- 31. OS1 (probably) a legalcompany tiny, close-knit team with ability to only focus on product-market fit no specialists, all doers, very adaptable OS2 a legal company, (most likely) some financing full team with ability to launch product and engage customers (generally) select specialists OS3 hiring first internal lawyers, HR team, real accounting many teams with ability to work on parallel threads and projects critical specialists, many functions OS4 global company, many offices teams of teams with ability to work in new products, new regions many specialists OS5 huge, global company essentially multiple companies with ability to play multiple product-market fits armies of specialists
- 32. 2003 2004 20052006 2007 2008 2009 2010 2011 2012 2013 2014
- 33. Stage 1: TheHousehold
- 34. Stage 2: TheTribe
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- 36. Stage 4: TheCity
- 37. Stage 5: TheNation
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- 39. OS1: Key Functions 1.Product 2. Product-market fit 3. Role of founders 4. Hiring & company culture/values 5. Staying solvent/financed
- 40. OS1: Important, butnot as key 1. Board of Directors 2. Analytics & dashboards 3. Strategy 4. Everything else
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- 43. Mostly things startslow (the left side is often long) Then, sometimes, they start to work And in some special cases, they really, really work
- 44. First 2 weeks(OS1) 9/22: Introduction 9/24: Sam Altman, Y Combinator 9/29: Michael Dearing, Harrison Metal 10/1: Ann Miura-Ko, Floodgate
- 45. Sam Altman President, YCombinator Founder, Loopt CS @ Stanford Sees thousands of new ventures; helps hundreds Assignment: reading & forum discussion
- 46. Mechanics, sites, logistics LinkedInGroup (private to class) - you’ll receive an invitation to the group via e-mail - we’ll post content, reading assignments, questions - you’ll post questions, answers, etc Medium (open to public) - we will collect your Medium user names - optional (but recommended) you will post assignments to Medium - we’ll curate & re-post the best each week Questions, Assignments, Readings - you’ll receive an invitation to the group via e-mail
- 47. Readings For Thursday(will post to LinkedIn group) Do Things That Don’t Scale, by Paul Graham www.paulgraham.com/ds.html Startup Advice, Briefly, by Sam Altman blog.samaltman.com/startup-advice-briefly Why Silicon Valley Works, by Sam Altman blog.samaltman.com/why-silicon-valley-works