LinkedIn co-founder Reid Hoffman: This is the common trait of every successful startup
Speed kills may be a popular saying. But don’t tell that to LinkedIn co-founder and newly-appointed Microsoft board member Reid Hoffman.
In his view, the ability to harness speed as a weapon is one of most important characteristics of successful Silicon Valley companies, and it is a tactic he encourages his companies to deploy.
“There is no modern Silicon Valley company that doesn’t actually, in fact, have kind of these speed genetics built in,” said Hoffman, who spoke Friday at the Technology Alliance annual luncheon in Seattle. “So, scale fast.”
In fact, Hoffman is such a big believer in the concept that he uses the term “blitzscaling” to define how companies can use speed to their advantage. It is also the name of an entrepreneurship class that he’s taught at Stanford University, and it’s the subject of a new podcast that he’s launching with those who’ve built companies that scale super fast.
Companies can survive without blitzscaling, but it would take some luck, he said. He defined the term as deploying “what seems to be 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.”
Companies such as Airbnb and Uber are classic blitzscalers. And Hoffman said it is very hard to compete with those companies which have decided to take the blitzscaling approach, because “they can throw a huge shadow” on those who are not using the tactic.
Hoffman also talked about the importance of OODA loops, a fighter pilot’s term that stands for Observe, Orient, Decide and Act. Just as the fighter pilots that have a faster OODA loop have a higher chance for survival, so do startup companies. Hoffman said that Silicon Valley is the only place in the world where OODA loop is used in a business context, though he noted that Chinese entrepreneurs would also use the term too if they had it in their parlance.
“Individuals and organizations throughout the Valley talk about their OODA loop, their learning, the speed at which they are moving, etc. because they feel that that speed is critical,” said Hoffman, who is also a venture investor at Greylock and has backed companies such as Seattle’s Convoy.
You can see Hoffman’s remarks on entrepreneurship and blitzscaling starting in minute 21 of the video below.
Also from the Reid Hoffman fireside chat:
- Reid Hoffman: ‘If you could train an AI to be a Buddhist, it would probably be pretty good’
- LinkedIn co-founder Reid Hoffman: How Seattle can help Silicon Valley become less myopic
Startups – GeekWire https://www.geekwire.com/2017/linkedin-co-founder-reid-hoffman-one-common-trait-successful-startups/