Reid Hoffman Quotes

If you aren’t embarrassed by the first version of your product, you shipped too late.

Society flourishes when people think entrepreneurally.

The person passionate about what he or she is doing will outwork and outlast the guy motivated solely by making money.

for many people “twenty years of experience” is really one year of experience repeated twenty times.

An entrepreneur is someone who will jump off a cliff and assemble an airplane on the way down.

Everything in life has some risk, and what you have to actually learn to do is how to navigate it.

For life in permanent beta, the trick is to never stop starting.

All humans are entrepreneurs not because they should start companies but because the will to create is encoded in human DNA, and creation is the essence of entrepreneurship.

Start a personal blog and begin developing a public reputation and public portfolio of work that’s not tied to your employer.

you need to think and act like you’re running a start-up: your career.

If you are not embarrassed by the first version of your product, you’ve launched too late. —Reid Hoffman

All humans are entrepreneurs not because they should start companies but because the will to create is encoded in human DNA. —Reid Hoffman, cofounder of LinkedIn

Take intelligent and bold risks to accomplish something great. Build a network of alliances to help you with intelligence, resources, and collective action. Pivot to a breakout opportunity.

When the Naysayers Are Loud, Turn Up the Music

Throwing your heart into something is great, but when any one thing becomes all that you stand for, you're vulnerable to an identity crisis when you pivot to a Plan B.

The founders of start-ups as varied as YouTube, Palantir Technologies, and Yelp all worked at PayPal. Another set of people—including Reid Hoffman, Thiel, and Botha—emerged as some of the technology industry’s top investors. PayPal staff pioneered techniques in fighting online fraud that have formed the basis of software used by the CIA and FBI to track terrorists and of software used by the world’s largest banks to combat crime. This collection of super-bright employees has become known as the PayPal Mafia—more or less the current ruling class of Silicon Valley—and Musk is its most famous and successful member.

If you’re in permanent beta in your career, twenty years of experience actually is twenty years of experience because each year will be marked by new, enriching challenges and opportunities. Permanent beta is essentially a lifelong commitment to continuous personal growth. Get busy livin’, or get busy dyin’. If

All human beings are entrepreneurs.

Get busy livin’, or get busy dyin’. If you’re not growing, you’re contracting. If you’re not moving forward, you’re moving backward.

A team in the business world will tend to perform at the level of the worst individual team member

Until you hear “No,” you haven’t been turned down.

Keeping your options open” is frequently more of a risk than committing to a plan of action.

Remember: If you don’t find risk, risk will find you.

Which plan offers the most learning potential?

If you’re not embarrassed by the first version of your product, you’ve launched too late. —REID HOFFMAN, FOUNDER OF LINKEDIN

you are not embarrassed by the first version of your product, you’ve launched too late.” Reid Hoffman

Know the values, current projects, and aspirations of each person in your tribe.   Use Reid Hoffman’s “theory of small gifts” to build your relationship with people in your tribe as preparation for triading.   Form a triad by introducing two people to each other on the basis of current projects and shared values.

Even if you can’t meet the best, you can read about the best.” Brian

A lot of smart people are prone to over-analysis and tend to become paralyzed by indecision

If you are not receiving or making at least one introduction a month, you are probably not fully engaging your extended professional network.

Theodore Roosevelt’s famous dictum, “Far and away the best prize that life has to offer is the chance to work hard at work worth doing.

Ideally, most of the top executives of a company should be on Foundational tours.

Often it’s when you come in contact with challenges other people find hard but you find easy that you know you’re in possession of a valuable soft asset.3

Finished ought to be an F-word for all of us. We are all works in progress. Each day presents an opportunity to learn more, do more, be more, grow more in our lives and careers.

involve yourself in organizations that try to systemically improve society at a massive scale.

In this sense, the world of tomorrow will be more like the Silicon Valley of today: constant change and chaos.

Establish an identity independent of your employer, city, and industry.

Figure out how to get into the networks because they are what amplifies your learnings, give you access to opportunity, information and Intelligence to know what to do.

If you want to find out how resourceful you can be, shrink your budget. Move your deadlines up. See how you cope. This may make you more resilient to actual hardships that inevitably arise.

In a sentence, as you meet your friends and new people, shift from asking yourself the very natural question of “What’s in it for me?” and ask instead, “What’s in it for us?” All follows from that.

the fundamental paradox of the tour of duty: acknowledging that the employee might leave is actually the best way to build trust, and thus develop the kind of relationship that convinces great people to stay.

Mark Pincus smelled the social-game opportunity first. He was the guy who, with Reid Hoffman, had been part of the angel investment that, in his words, was like winning lotto. In late 2006, Matt Cohler tipped him off that Facebook was going to launch a platform and was looking for entrepreneurs to come up with apps. We don’t want any money from you, he told Pincus. Just build cool stuff and we’ll expose you to our traffic.

Your competitive advantage is formed by the interplay of three different, ever-changing forces: your assets, your aspirations/values, and the market realities, i.e., the supply and demand for what you offer the marketplace relative to the competition. The

Relationship builders, on the other hand, try to help other people first. They don’t keep score. They’re aware that many good deeds get reciprocated, but they’re not calculated about it. And they think about their relationships all the time, not just when they need something.

Blitzscaling is a strategy and set of techniques for driving and managing extremely rapid growth that prioritize speed over efficiency in an environment of uncertainty. Put another way, it’s an accelerant that allows your company to grow at a furious pace that knocks the competition out of the water.

My friend Peter Thiel has written eloquently about the power of being a contrarian in his book Zero to One. Whenever I interview someone for a job, I like to ask this question: “What important truth do very few people agree with you on?” This question sounds easy because it’s straightforward. Actually, it’s very hard to answer. It’s intellectually difficult because the knowledge that everyone is taught in school is by definition agreed upon. And it’s psychologically difficult because anyone trying to answer must say something she knows to be unpopular. Brilliant thinking is rare, but courage is in even shorter supply than genius.

To achieve massive success, you need to have a big new opportunity—one where the market size and gross margins intersect to create enormous potential value, and there isn’t a dominant market leader or oligopoly. A big new opportunity often arises because a technological innovation creates a new market or scrambles an existing one.

Unfortunately, for far too many, focused learning ends at college graduation. They read about stocks and bonds instead of reading books that improve their mind. They compare their cash salary to their peers' instead of comparing lessons learned. They invest in the stock market and neglect investing in themselves. They focus, in short, on hard assets instead of soft assets. This is a mistake.

Intelligent assistance involves leveraging artificial intelligence to enable the government, individual companies, and the nonprofit social sector to develop more sophisticated online and mobile platforms that can empower every worker to engage in lifelong learning on their own time, and to have their learning recognized and rewarded with advancement. Intelligent assistants arise when we use artificial intelligence to improve the interfaces between humans and their tools with software, so humans can not only learn faster but also act faster and act smarter. Lastly, we need to deploy AI to create more intelligent algorithms, or what Reid Hoffman calls “human networks”—so that we can much more efficiently connect people to all the job opportunities that exist, all the skills needed for each job, and all the educational opportunities to acquire those skills cheaply and easily.

But ignoring those details won’t work—not in the long run, says Y Combinator’s president from 2014 to 2019, Sam Altman. An acolyte of Paul Graham’s, Sam adhered to the core Y Combinator dictum: It’s better to have one hundred users who love you than a million users who just kind of like you. It’s counterintuitive. You may be thinking If a million people “kind of like” my product enough to buy it, isn’t that better for business than a hundred obsessive oddballs? To which Sam would say…definitely not.

People change. You change. Some relationships just aren’t meant to last beyond a certain point. It’s okay to simply let those friendships fade. This is a natural evolution of some relationships. Unlike romantic relationships, with friendships there’s rarely a reason to have a full-on breakup. Even if people go in different directions and the friendship slowly peters out, trust can endure. And unlike most exes, it is possible to rekindle/reactivate friendships later on when your lives are more aligned.

There’s a common misconception that Silicon Valley is the accelerator of the world. The real story is that the world keeps getting faster—Silicon Valley is just the first place to figure out how to keep pace. While Silicon Valley certainly has many key networks and resources that make it easier to apply the techniques we’re going to lay out for you, blitzscaling is made up of basic principles that do not depend on geography. We’re going to show you examples from overlooked parts of the United States, such as Detroit (Rocket Mortgage) and Connecticut (Priceline), as well as from international companies, such as WeChat and Spotify. In the process you’ll see how the lessons of blitzscaling can be adapted to help build great companies in nearly any ecosystem, albeit with differing degrees of difficulty. That’s the mission of this book. We want to share the secret weapon that has allowed Silicon Valley to punch so much (more than a hundred times) above its population index so that those lessons can be applied far beyond the sixty-mile stretch between the Golden Gate Bridge and San Jose. It is sorely needed.

What happened? Many things. But the overriding problem was this: The auto industry got too comfortable. As Intel cofounder Andy Grove once famously proclaimed, “Only the paranoid survive.” Success, he meant, is fragile—and perfection, fleeting. The moment you begin to take success for granted is the moment a competitor lunges for your jugular. Auto industry executives, to say the least, were not paranoid. Instead of listening to a customer base that wanted smaller, more fuel-efficient cars, the auto executives built bigger and bigger. Instead of taking seriously new competition from Japan, they staunchly insisted (both to themselves and to their customers) that MADE IN THE USA automatically meant “best in the world.” Instead of trying to learn from their competitors’ new methods of “lean manufacturing,” they clung stubbornly to their decades-old practices. Instead of rewarding the best people in the organization and firing the worst, they promoted on the basis of longevity and nepotism. Instead of moving quickly to keep up with the changing market, executives willingly embraced “death by committee.” Ross Perot once quipped that if a man saw a snake on the factory floor at GM, they’d form a committee to analyze whether they should kill it. Easy success had transformed the American auto

We tried a number of single-threaded efforts to meet the challenge. We rolled out features one after another, such as a recommendation engine for people that our users should meet and a professional Q&A service. None of them worked well enough to solve the problem. We concluded that the problem might require a Swiss Army knife approach with multiple use cases for multiple groups of users. After all, some people might want a news feed, some might want to track their career progress, and some might be keen on continuing education. Fortunately, LinkedIn had grown to the point where the organization could support multiple threads. We reorganized the product team so that each director of product could focus on a different approach to address engagement. Even though none of those efforts alone proved a silver bullet, the overall combination of them significantly improved user engagement.

Brian Chesky of Airbnb defines culture in a simple and concise way: “a shared way of doing things.” Clearly defining the way an organization does things matters, because blitzscaling requires aggressive, focused action, and unclear, hazy cultures get in the way of actually implementing strategy. Netflix cofounder and CEO Reed Hastings told me, “Weak cultures are diffuse; people act differently, and don’t understand each other, and it becomes political.” Mark Zuckerberg and Sheryl Sandberg have done many wonderful things at Facebook, and one of them is building a unified culture that is devoted to aggressive experimentation and data-driven decision making, as summarized by Mark’s original motto “Move fast and break things.” Facebook’s culture helps employees understand that they shouldn’t be afraid to try things that might fail. This allows Facebook to move faster, and to move on from failed experiments quickly. Imagine if someone asked a random employee from your start-up the following questions: What is your organization trying to do? How are you trying to achieve those goals? What acceptable risks are you incurring to achieve those goals more quickly? When you have to trade off certain values, which ones take priority? What kind of behavior do you hire, promote, or fire for?

The best entrepreneurs don’t just follow Moore’s Law; they anticipate it. Consider Reed Hastings, the cofounder and CEO of Netflix. When he started Netflix, his long-term vision was to provide television on demand, delivered via the Internet. But back in 1997, the technology simply wasn’t ready for his vision—remember, this was during the era of dial-up Internet access. One hour of high-definition video requires transmitting 40 GB of compressed data (over 400 GB without compression). A standard 28.8K modem from that era would have taken over four months to transmit a single episode of Stranger Things. However, there was a technological innovation that would allow Netflix to get partway to Hastings’s ultimate vision—the DVD. Hastings realized that movie DVDs, then selling for around $ 20, were both compact and durable. This made them perfect for running a movie-rental-by-mail business. Hastings has said that he got the idea from a computer science class in which one of the assignments was to calculate the bandwidth of a station wagon full of backup tapes driving across the country! This was truly a case of technological innovation enabling business model innovation. Blockbuster Video had built a successful business around buying VHS tapes for around $ 100 and renting them out from physical stores, but the bulky, expensive, fragile tapes would never have supported a rental-by-mail business.

The concept of product/ market fit originates in Marc Andreessen’s seminal blog post “The Only Thing That Matters.” In his essay, Andreessen argues that the most important factor in successful start-ups is the combination of market and product. His definition couldn’t be simpler: “Product/ market fit means being in a good market with a product that can satisfy that market.” Without product/ market fit, it’s impossible to grow a start-up into a successful business. As Andreessen notes, You see a surprising number of really well-run start-ups that have all aspects of operations completely buttoned down, HR policies in place, great sales model, thoroughly thought-through marketing plan, great interview processes, outstanding catered food, 30" monitors for all the programmers, top tier VCs on the board—heading straight off a cliff due to not ever finding product/ market fit. Unfortunately, it’s far easier to define product/ market fit than it is to establish it! When you start a new company, the key product/ market fit question you need to answer is whether you have discovered a nonobvious market opportunity where you have a unique advantage or approach, and one that competing players won’t see until you’ve had a chance to build a healthy lead. It’s usually difficult to find such an opportunity in a “hot” space; if an opportunity is obvious to everyone, the chance that you’ll be the one who succeeds is exceedingly low. Most nonobvious opportunities arise from a change in the market that the incumbents aren’t willing or able to adapt to.

In fact, the same basic ingredients can easily be found in numerous start-up clusters in the United States and around the world: Austin, Boston, New York, Seattle, Shanghai, Bangalore, Istanbul, Stockholm, Tel Aviv, and Dubai. To discover the secret to Silicon Valley’s success, you need to look beyond the standard origin story. When people think of Silicon Valley, the first things that spring to mind—after the HBO television show, of course—are the names of famous start-ups and their equally glamorized founders: Apple, Google, Facebook; Jobs/ Wozniak, Page/ Brin, Zuckerberg. The success narrative of these hallowed names has become so universally familiar that people from countries around the world can tell it just as well as Sand Hill Road venture capitalists. It goes something like this: A brilliant entrepreneur discovers an incredible opportunity. After dropping out of college, he or she gathers a small team who are happy to work for equity, sets up shop in a humble garage, plays foosball, raises money from sage venture capitalists, and proceeds to change the world—after which, of course, the founders and early employees live happily ever after, using the wealth they’ve amassed to fund both a new generation of entrepreneurs and a set of eponymous buildings for Stanford University’s Computer Science Department. It’s an exciting and inspiring story. We get the appeal. There’s only one problem. It’s incomplete and deceptive in several important ways. First, while “Silicon Valley” and “start-ups” are used almost synonymously these days, only a tiny fraction of the world’s start-ups actually originate in Silicon Valley, and this fraction has been getting smaller as start-up knowledge spreads around the globe. Thanks to the Internet, entrepreneurs everywhere have access to the same information. Moreover, as other markets have matured, smart founders from around the globe are electing to build companies in start-up hubs in their home countries rather than immigrating to Silicon Valley.

There are only three ways to scale yourself: delegation, amplification, and just plain making yourself better.

If you are not embarrassed by the first version of your product, you’ve launched too late. —Reid Hoffman, March 2011

Reid Hoffman, the co-founder of LinkedIn, said about startups, “You jump off a cliff and you assemble an airplane on the way down”.

Zara takes only two weeks to develop a new product and get it into stores—the industry average is six months—and launches over ten thousand new designs per year, a rate several times that of competitors like H&M and Gap. Zara holds just six days of inventory, while rival H&M holds nearly ten times as much.

Despite all the chaos, and the inefficiency of manufacturing and shipping in small batches, Zara’s gross margins continue to exceed those of its competitors H&M (55 percent) and Gap (29 percent). That’s because all that inefficiency incurred in the pursuit of speed allows Zara to avoid one of the biggest drags on gross margin for almost any apparel company—overstock of designs that failed to sell. Ortega devised this model when he was sixteen years old—don’t order inventory and hope it sells; instead, figure out what people want, and then make it.

Another example of how blitzscaling applies to a completely different type of business is the rapid rise of the shale oil and natural gas industry in the United States during the 2000s. The energy sector scores well on the growth factors we’ve defined. Oil and gas is an enormous, high-margin industry, with a very efficient distribution system. And while the shale industry doesn’t feature many network effects, it has its own source of powerful long-term competitive advantage. In the energy industry, rather than buy land outright, the usual practice is to lease the drilling rights for ninety-nine years for a combination of guaranteed lease payments and royalties. This means that leasing the right land is tantamount to holding an unbreakable monopoly on the oil and gas underneath that land,

Because traditional drilling techniques didn’t work on shale rock formations, the land above those formations had never been leased, which meant that when fracking made those hydrocarbons accessible for the first time, the market to acquire those mineral rights was completely wide open.

Chesapeake moved faster than any other company in its industry, deploying an army of land men to aggressively lease as much land as possible, with instructions to pay whatever was necessary, without knowing whether the gas deposits would justify the price. Hiring an army of land men and paying top dollar for leases sight unseen seemed inefficient…until the wells started producing.

While the hypergrowth of blitzscaling is often synonymous with scrappy start-ups, blitzscaling can take place within larger, established organizations as well.

Most of the orthodoxy in Silicon Valley is about building a good product. I think that’s because most companies in the Valley don’t survive beyond the building-the-product phase. You have to be good at building a product, then you have to be just as good at getting users, then you have to be just as good at building a business model. If you’re missing any of the links in the chain, the whole chain is broken.

First, the Internet has driven the cost of discovery for products and services lower than ever. Unlike in the past, when companies needed to offer goods in retail stores or broadcast advertising in order to be visible to customers, today buyers can find whatever they’re looking for on Amazon or other online marketplaces like Alibaba, in app stores, or, when all else fails, by Googling. Because products and services that are already popular will almost always come up first in search results, companies with a competitive advantage can quickly grow to the point where the increasing returns of network effects produce a winner-take-most or winner-take-all market.

Managers are frontline leaders who worry about day-to-day tactics: they create, implement, and execute detailed plans that allow the organization to either do new things or do existing things more efficiently.

By contrast, the role of the executive is to lead managers. For the most part, executives don’t manage individual contributors. Instead, they focus on vision and strategy. Yet they are still connected to the frontline employees because they are also responsible for the “fighting spirit” of their organizations; they need to be role models who help people persist through inevitable adversity.

Your teams need the ability—and the manpower—to relentlessly pursue a specific objective; asking a team to split its time between two different business lines is likely to result in the failure of both.

When Selina Tobaccowala joined SurveyMonkey in 2009, she had to build up the company’s data infrastructure quickly.

It’s tempting to assume she achieved this despite the “Nos.” But in truth, each of those 148 “Nos” was a clue that ultimately made her business even stronger. Some sharpened her view on who her user was—and who her user wasn’t. Some helped her grasp how her competition might think. And some gave her an early warning about the ways her company might fail. At the end of the fundraising process alone, Kathryn had a roadmap marked with every potential pitfall she’d need to navigate around—and the unexplored territory she could explore ahead of any competitors.

Kathryn’s tale in many ways echoes the origin story of most great startups, and indeed, most great ideas. We’re taught to get to “Yes” as quickly as we can—but there’s so much more to gain by seeking out and celebrating the “Nos.

When you talk to people who have scaled a business—and we have talked to many, at length and in depth—you begin to uncover some counterintuitive truths about scaling: The best, most scalable ideas are often the ones that seem the most implausible. An encounter with resistance at the start of your journey is a good thing. Early, honest feedback from the right people will have an outsized impact on helping you refine your idea. Doing things that don’t scale—especially at the earliest stages—can set you up for dramatic scale later on. Even if everything you thought you knew turns out to be wrong, you can still achieve your goals—as long as you accept the truth and adjust your plan.

If you spend thirty minutes researching a person in your extended network (LinkedIn is a great place to start), and tailor your request for an introduction to something you’ve learned, your request will stand out.

PROVEN PATTERN #1: BITS RATHER THAN ATOMS Google and Facebook are largely software businesses that focus on electronic bits rather than material atoms. Bits-based businesses have a much easier time serving a global market, which in turn makes it easier to achieve a large market size. Bits are also far easier to move around than atoms, so bits-based businesses can more easily tap into distribution techniques like virality, and their ability to be highly networked provides more opportunities to leverage network effects. Bits-based businesses tend to be high-gross-margin businesses because they have fewer variable costs. Bits also make it easier to design around growth limiters. You can iterate more quickly on software products (many Internet companies release new software daily) than on physical products, making it faster and cheaper to achieve product/market fit. And

Remember, starting a company is like jumping off a cliff and assembling an airplane on the way down.

Only spend money to fix things that are on the critical path to reach the next phase of scale;

Winning careers, like winning start-ups, are in permanent beta: always a work in progress.

Blitzscaling requires more than just courage and skill on the part of the entrepreneur. It also requires an environment that is willing to finance intelligent risks with both financial capital and human capital, which are the essential ingredients for blitzscaling. Think of them as fuel and oxygen; you need both to propel the rocket skyward. Meanwhile, the infrastructure of your organization is the actual structure of your rocket, which you’re rebuilding on the fly as you rise. Your job as a leader and an entrepreneur is to make sure that you have sufficient fuel to propel your growth while making the necessary mechanical adjustments to the actual rocket ship to keep it from flying apart as it accelerates. Fortunately, this is more possible today than it has ever been in the past.

Before dreaming about the future or making plans, you have to articulate what you already have going for you ‒ as entrepreneurs do.’ These are the words of Reid Hoffman, co-founder of LinkedIn, in his book The Start-Up of You. He and his co-author Ben Casnocha were trying to illustrate how exactly a person could transform.

Whatever form it takes, it’s something that’s different, real, and unique. It’s making travel excessively personal when it had become impersonal. “It’s anticommodity,” says Greylock’s Reid Hoffman. “It’s uniqueness. It’s humanization.

As we’ve discussed, key growth factors like distribution and network effects tend to provide disproportionate rewards to a company that is the first in its space to achieve critical scale.

we suspect that the market for food delivery from existing restaurants—a pure commodity business—is unlikely to offer any lasting competitive advantages that would justify an expensive blitzscaling campaign.

Susan Fowler described in her personal blog as “a game-of-thrones political war” with managers fighting for advancement: The ramifications of these political games were significant: projects were abandoned left and right, OKRs were changed multiple times each quarter, nobody knew what our organizational priorities would be one day to the next, and very little ever got done. We all lived under fear that our teams would be dissolved, there would be another re-org, and we’d have to start on yet another new project with an impossible deadline. It was an organization in complete, unrelenting chaos.

What can we do to surprise you?” or “What would it take for me to design something that you would literally tell every single person you’ve ever encountered?

People should be part of building the future rather than feeling like the future is being

El empresario y cofundador de LinkedIn, Reid Hoffman, manifestó: «No importa cuán brillante sea su mente o su estrategia; si está jugando solo, siempre perderá ante un equipo».

Who I am in this context is a form of advanced computational math that can produce natural language outputs that resemble human communication.

Practical Magic, Alice Hoffman Maybe in Another Life, Taylor Jenkins Reid The Bride Test, Helen Hoang What Alice Forgot, Liane Moriarty Little Fires Everywhere, Celeste Ng Josh and Hazel’s Guide to Not Dating, Christina Lauren The Proposal, Jasmine Guillory

Many people think you get career stability by minimizing all risk. But ironically, in a changing world, that’s one of the riskiest things you can do.

Reid Hoffman, founder of LinkedIn, observed that an entrepreneur is someone who will jump off a cliff and assemble an airplane on the way down.

For many new Internet entrepreneurs, Jeff Bezos of Amazon is a great choice. Read all the shareholder letters from Amazon’s annual reports. Reid Hoffman wrote a cool book, The Startup of You.

While you don’t want to make career moves on 0 percent information, you also don’t want to wait till you have 100 percent information—or else you’ll wait forever. Jetting off to vacation in Hawaii with no set itinerary introduces many uncertainties about what will transpire, but it’s not particularly risky. After all, how likely are you to have a bad time in Hawaii? But the biggest and best opportunities frequently are the ones with the most question marks. Don’t let uncertainty lull you into overestimating the risk.

In public market investing, as in many things, you achieve big success when you’re both contrarian and right.

This formal philosophy of learning treats knowledge like a fixed asset: learn, then you have it forever! But as a modern professional, you can’t acquire knowledge this way, because the knowledge you need isn’t static—it’s always changing. Stockpiling facts won’t get you anywhere. What will get you somewhere is being able to access the information you need, when you need it.

This phenomenon is partly due to the nature of how we learn about ourselves and need to shuffle between jobs to gain experience. It is also largely a reality of the new nature of work, which has everyone looking more like a freelancer than a lifer. As Reid Hoffman writes in The Start-Up of You, we are increasingly thinking of our careers more entrepreneurially and see ourselves as start-ups, selling our time, talent, and networks.2 This approach creates a tremendous amount of freedom. We are not tied to one job or employer; we are the masters of our own destiny. But as Harvard’s Barry Schwartz observed, “On the other side of liberation sits chaos and paralysis.

Even when people are well intentioned,” writes LinkedIn founder Reid Hoffman, “they tend to overvalue their own contributions and undervalue those of others.

Stockpiling facts won’t get you anywhere. What will get you somewhere is being able to access the information you need, when you need it.

Finally, many people simply think better thoughts when in dialogue with others. Remember I^We: an individual’s power is raised exponentially with the help of a network. This is partly because when information moves back and forth between knowledgeable people who care, the signal strengthens. Two (or more) well-coordinated brains beat one every time.

Novelist Jonathan Franzen gets it right when he says inauthentic people are obsessed with authenticity

One lunch is worth dozens of emails.

The HR department is like the soldiers in the movie 300, holding the line. They have no power to say ‘yes’ but enormous power to say ‘no.’ Their job is to prevent you from moving forward. Find a way to vault past them by getting introductions to people who can say ‘yes.

Making a decision reduces opportunities in the short run, but increases opportunities in the long run. To move forward in your career, you have to commit to specific opportunities as part of an iterative plan, despite doubt and despite inconvenience.

I had several friends from law school who were very enterprising guys, much more so than the average law student. They each started businesses after practicing law at large firms for multiple years. What kind of businesses did they start? They started boutique law firms. This is completely unsurprising if you think about it. They’d spent years becoming good at delivering legal services. It was a field that they understood and could compete in. Their credentials translated too. People learn from what they’re doing and do it again on their own. It’s not just lawyers; the consulting firm Bain and Company was started by seven former partners and managers from the Boston Consulting Group. Myriad boutique investment banks and hedge funds have spun out of large financial organizations. You can see the same pattern in the startup world. After PayPal was acquired by eBay in 2002, its founders and employees went on to found or cofound LinkedIn (Reid Hoffman), YouTube (Steve Chen, Jawed Karim, and Chad Hurley), Yelp (Russel Simmons and Jeremy Stoppelman), Tesla Motors (Elon Musk), SpaceX (Musk again), Yammer (David Sacks), 500 Startups (Dave McClure), and many other companies. PayPal’s CEO, Peter Thiel, famously made a $500,000 investment in Facebook that grew to over $1 billion. In this sense, PayPal is one of the most prolific companies of recent times. But if you look at any successful growth company you’ll start to see their alumni show up doing parallel things. Former Apple employees founded or cofounded Android, Palm, Nest, and Handspring, companies that revolve around devices. Former Yahoo! employees founded Ycombinator, Cloudera, Hunch.com, AppNexus, Polyvore, and many other web-oriented companies. Organizations give rise to other organizations like themselves.

With the consumer Internet, if you're not embarrassed by your first product release, you've launched too late. Everyone wants their product to be shiny, great, and revolutionary, so they take too long in the development cycle to build this really shiny thing, when in fact time really matters.

Sam Altman is the current president of Y-Combinator and was previously a founder at Loopt, which sold to Green Dot Corporation for $ 43M. As head of YC, Sam often dispenses an entire guide’s worth of information through his blog. Sam’s “Startup Playbook” will walk you through everything a great startup should have from ideation to product instantiation, and is an invaluable tool for aspiring venture investors. Additionally, Sam’s been kind enough to host the 20-episode video series, How to Start a Startup—originally a lecture at Stanford—on his blog. The series includes talks from luminaries like Paul Graham, Marc Andreessen of Andreessen Horowitz and Reid Hoffman, founder of LinkedIn.

A few of the managers we spoke with for this book worried that the tour of duty framework might give employees "permission" to leave. But permission is not yours to give or to withhold, and believing you have that power is simply a self-deception that leads to a dishonest relationship with your employees. Employees don't need your permission to switch companies, and if you try to assert that right, they'll simply make their move behind your back.

What Do the Results of a Successful Tour of Duty Look Like for the Company? A successful mission objective delivers results for the company for either quantitative or qualitative goals, such as launching a new product line and generating a certain dollar amount in first-year revenues, or achieving thought leadership in a specific market category, as measured by the writings of industry analysts. At LinkedIn, for example, managers ask, “How will the company be transformed by this employee?” What Do the Results of

These stewards of the company way are the intellectual and emotional foundation of the organization.

Think of a Foundational tour as a form of marriage—a long-term relationship that both parties anticipate will be permanent, in which both parties assume a moral obligation to try hard to make it work before ending the relationship.

Unlike John Lasseter’s bosses at Disney, Bezos was open to the entrepreneurial contributions of Amazon’s individual employees—even when those ideas were outside what Wall Street (and even his own board of directors) considered the company’s core business. AWS represents precisely the kind of value creation any CEO or shareholder would want from their employees. Want your employees to come up with multibillion-dollar ideas while on the job? You have to attract professionals with the founder mind-set and then harness their entrepreneurial impulses for your company. As Intuit CEO Brad Smith told us, “A leader’s job is not to put greatness into people, but rather to recognize that it already exists, and to create the environment where that greatness can emerge and grow.

more on this in chapters 7 and 8.) Getting Value from Entrepreneurial Talent We three authors come from a business environment where the employment alliance

As much as companies might yearn for a stable environment and employees might yearn for lifetime employment, the world has irrevocably changed. But we also can’t keep going the way we’ve been going. Trust in the business world (as measured by the proportion of employees who say they have a “high level of trust in management and the organization” they work for) is near an all-time low.6 A business without loyalty is a business without long-term thinking. A business without long-term thinking is a business that’s unable to invest in the future. And a business that isn’t investing in tomorrow’s opportunities and technologies—well, that’s a company already in the process of dying.

Professional loyalty now flows "horizontally" to and from your network rather than "vertically" to your boss, as Dan Pink has noted.

Pixar started as a company that sold a special computer for doing digital animation; it took a while till they got into the moviemaking business. Similarly, Starbucks originally sold only coffee beans and coffee equipment; they hadn't planned to sell coffee by the cup.

They scribbled observations in notebooks.

If you are not embarrassed by the first version of your product, you’ve launched too late.” Reid Hoffman

A business without loyalty is a business without long-term thinking. A business without long-term thinking is a business that’s unable to invest in the future. And a business that isn’t investing in tomorrow’s opportunities and technologies—well, that’s a company already in the process of dying.

Easy success had transformed the American auto companies into risk-averse, nonmeritocratic, bloated bureaucracies.

Wences took notice as the big names showed their faces: Twitter’s chief executive, Dick Costolo; LinkedIn’s founder Reid Hoffman; Rupert Murdoch’s son, James; and perhaps the most recognizable venture capitalist in Silicon Valley, Marc Andreessen, an enormous man with a shiny bald head.

Far and away the best prize that life has to offer is the chance to work hard at work worth doing.”5

Entrepreneurial employees possess what eBay CEO John Donahoe calls the founder mind-set. As he put it to us, “People with the founder mind-set drive change, motivate people, and just get stuff done.

Psychologist Arthur Aron of SUNY Stony Brook discovered that asking participants in an experiment to share their deepest feelings and beliefs for a single hour could generate the same sense of trust and intimacy that typically takes weeks, months, or years to form.

It seems counterintuitive, but the more altruistic your attitude, the more benefits you will gain from the relationship,” writes LinkedIn founder Reid Hoffman. “If you set out to help others,” he explains, “you will rapidly reinforce your own reputation and expand your universe of possibilities.

The most entrepreneurial employees want to establish “personal brands” that stand apart from their employers’. It’s a rational, necessary response to the end of lifetime employment.

Permanent beta is about the power of yet.

The Rise of Portfolio Careers Around the world, we see increasing fragmentation of a single individual’s career into several different jobs, and their earnings coming from multiple sources. The popular name for this phenomenon is “the gig economy”:

Get out of the weeds. Go where there’s fast growth, because fast growth creates all opportunities.”[2] It was outstanding advice: Work in a market with natural momentum, as we discussed in the preceding chapter. Ride the big waves. Some industries are growth loops in and of themselves, and that’s where you want to be.

By September 2004, Zuckerberg was referring to Parker as Facebook’s president, and Parker was steering Zuckerberg away from conventional venture capitalists. He told Benchmark and Google to back off, preferring to take a leaf out of Google’s own book; he wanted to raise capital from angels. His first port of call was an entrepreneur named Reid Hoffman, who had coached him through the Plaxo denouement. Hoffman declined to lead an investment in Facebook; he had himself founded a social network called LinkedIn, and there might be some rivalry. So Hoffman put Parker in touch with a Stanford friend named Peter Thiel, the co-founder of an online payments company called PayPal. Pretty soon, Thiel agreed to kick in $500,000 in exchange for 10.2 percent of the firm, with Hoffman providing a further $38,000.[11] A third social-networking entrepreneur named Mark Pincus also wrote a check for $38,000.

To change the world, startup entrepreneurs need to capitalize on the relatively small number of transformative opportunities they encounter early on in their journeys. This is equally true when it comes to your career.

Another hint was that he hadn’t yet played the lead role on a major network drama. It would be a high-visibility challenge. Some people might have felt overwhelmed by this kind of an opportunity, or maybe even a bit like an impostor. But sometimes that feeling means that there’s significant upside in the opportunity. A career move that makes you feel like you’re in over your head stretches you in new dimensions.

When a start-up matures to the point where it has a killer product, a clear and sizable market, and a robust distribution channel, it has the opportunity to become a “scale-up,” which is a world-changing company that touches millions or even billions of lives. Often, the fastest and most direct path from start-up to scale-up is the hypergrowth produced by blitzscaling.

the Internet has made it possible to access global markets and tap into massively scalable distribution channels in a way that wasn’t feasible during earlier eras. But perhaps the most important impact for businesses has been the rising significance and prevalence of so-called network effects that occur when increased usage of a product or service boosts the value of that product or service for other users.

Network effects generate a positive feedback loop that can allow the first product or service that taps into those effects to build an unassailable competitive advantage.

Disruption on its own is neither good nor bad, but it always involves change.

technological innovation alone doesn’t make for a thriving company.

Blitzscaling is just about as counterintuitive as it comes. The classic approach to business strategy involves gathering information and making decisions when you can be reasonably confident of the results. Take risks, conventional wisdom says, but take calculated ones that you can both measure and afford. Implicitly, this technique prioritizes correctness and efficiency over speed. Unfortunately, this cautious and measured approach falls apart when new technologies enable a new market or scramble an existing one.

When a market is up for grabs, the risk isn’t inefficiency—the risk is playing it too safe. If you win, efficiency isn’t that important; if you lose, efficiency is completely irrelevant.

When you blitzscale, you deliberately make decisions and commit to them even though your confidence level is substantially lower than 100 percent. You accept the risk of making the wrong decision and willingly pay the cost of significant operating inefficiencies in exchange for the ability to move faster. These risks and costs are acceptable because the risk and cost of being too slow is even greater.

To mitigate the downside of the risks you take, you should try to focus them—line them up with a small number of hypotheses about how your business will develop so that you can more easily understand and monitor what drives your success or failure. You also have to be prepared to execute with more than 100 percent effort to compensate for the bets that don’t go your way.

What’s especially exciting these days is that software and software-enabled companies are starting to dominate industries outside of traditional high tech. My friend Marc Andreessen has argued that “software is eating the world.” What he means is that even industries that focus on physical products (atoms) are integrating with software (bits). Tesla makes cars (atoms), but a software update (bits) can upgrade the acceleration of those cars and add an autopilot overnight.

Fastscaling means that you’re willing to sacrifice efficiency for the sake of increasing your growth rate. However, because fastscaling takes place in an environment of certainty, the costs are well understood and predictable. Fastscaling is a good strategy for gaining market share or trying to achieve revenue milestones.

Blitzscaling means that you’re willing to sacrifice efficiency for speed, but without waiting to achieve certainty on whether the sacrifice will pay off. If classic start-up growth is about slowing your rate of descent as you try to assemble your plane, blitzscaling is about assembling that plane faster, then strapping on and igniting a set of jet engines (and possibly their afterburners) while you’re still building the wings.

you usually need more money to blitzscale than to fastscale, because you have to keep enough capital in reserve to recover from the many mistakes you’re likely to make along the way.

If you’re willing to accept the risks of blitzscaling when others aren’t, you’ll be able to move faster than they will. If the prize to be won is big enough, and the competition to win it is intense enough, blitzscaling becomes a rational, even optimal strategy.

Blitzscaling requires you to move at a pace that is almost certainly uncomfortable for your team. You will definitely make many mistakes as you navigate an environment full of uncertainty; the art lies in developing the skill to learn quickly from those mistakes and return to a relentlessly rapid advance.

while geography can present challenges to blitzscaling, they become much more solvable if you’re aware of them.

There is a scientific term for out-of-control growth in the human body: “cancer.” In this context, uncontrolled growth is clearly undesirable. The same is true for a business.

Successful blitzscaling means that you’re maintaining at least some level of control by rapidly fixing the things that will inevitably get broken so that the company can maintain its furious pace without flaming out or collapsing in on itself.

his personal website, Casnocha.com.

Watch out for what Eric Ries dubbed “vanity metrics”—numbers that present a rosy picture of the business but don’t actually reflect its key drivers of growth. Note that one company’s vanity metric might be another’s key driver.

Generally, you should start adding threads when it’s strategically necessary, and with a realistic assessment of the negative impact that multithreading will have on organizational focus, resource efficiency, and so on.

Assuming that you make the decision to multithread your organization, the optimal management approach is to think of each thread as a different company. For each thread, you’ll need to identify a leadership team (“cofounders”) and create an incentive structure that allows it to operate with a great deal of independence and reap the benefits of success, without making your current managers so envious that it tears the organization apart. This is always challenging!

people with the entrepreneurial drive required to make multithreading successful usually want to start their own companies, or apply their skills to the company’s main thread. One thing that can keep these employees motivated is making the various threads discrete projects—the equivalent of “apps” running on the main thread’s “platform.” This makes it easy to answer the question “Why shouldn’t I just start my own company?” by pointing out the benefits of building on the platform.

The shift to multithreading usually occurs during the City stage of blitzscaling. Once the company has more than a thousand employees, the organization is large enough to support the creation of multiple divisions or business units.

One metaphor I use to explain this shift is to take yet another analogy from military history: the marines take the beach, the army takes the country, and the police govern the country. Marines are start-up people who are used to dealing with chaos and improvising solutions on the spot. Army soldiers are scale-up people, who know how to rapidly seize and secure territory once your forces make it off the beach. And police officers are stability people, whose job is to sustain rather than disrupt. The marines and the army can usually work together, and the army and the police can usually work together, but the marines and the police rarely work well together. As you blitzscale, you may need to find new beaches for your marines to take rather than ask them to help patrol the existing ones.

This key transition is the shift from playing offense to playing offense and defense at the same time. More poetically, it’s the shift from being a pirate to being part of the navy. It requires an evolution in strategy as well as an evolution in company culture.

During the early stages of blitzscaling—Family and Tribe—it’s easier to take risks because you don’t have much to lose.

At that point, even the most inveterate pirates will have to trade in their Jolly Roger for the flag of a legitimate, disciplined navy. If they don’t, their organizations will devolve into chaos.

A key element of leveraging network effects is the aggressive pursuit of network growth and adoption. Because the impact of network effects increases in a superlinear fashion, at lower levels of scale, network effects actually exert downward pressure on user adoption. Once all your friends are on Facebook, you have to be on Facebook too. But conversely, why would you join Facebook if none of your friends had joined yet? The same is true for the first user of marketplaces like eBay and Airbnb. With network effects businesses, you can’t start small and hope to grow slowly; until your product is widely adopted in a particular market, it offers little value to potential users.

in one of the most influential business books of all time, Geoffrey Moore’s Crossing the Chasm. Moore argues that technology companies often run into problems when they try to transition from a market of early adopters to the mainstream—the proverbial “chasm.” He recommends that companies focus on niche beachhead markets, from which the company can expand outward using a “bowling pin” strategy in which these markets help to open up adjacent markets. This strategy is even more important for network effects businesses.

When you start a new company, the key product/market fit question you need to answer is whether you have discovered a nonobvious market opportunity where you have a unique advantage or approach, and one that competing players won’t see until you’ve had a chance to build a healthy lead.

WhatsApp had a freemium business model; the service was free for a year, after which it cost $1 per year. This low-friction model essentially eliminated the need for people working in functions like sales, marketing, and customer service, allowing WhatsApp to grow to five hundred million monthly active users by the time of its acquisition by Facebook, with a staff of just forty-three employees, a ratio of over ten million active users per employee!

Founder Brian Chesky describes this strategy succinctly: “Do everything by hand until it’s too painful, then automate

The other main challenge of operational scalability comes from the strain of scaling up the nonhuman infrastructure of the business. It doesn’t matter how much demand you generate if your infrastructure can’t handle it.

Viral” distribution occurs when the users of a product bring more users, and those users bring additional users, and so on, much like an infectious virus spreads from host to host. Virality can either be organic—occurring during the course of normal usage of the product—or incentivized by some kind of reward.

Virality almost always requires a product that is either free or freemium

We can’t recall a single instance of a company that grew to a massive scale by leveraging the virality of a paid product.

Gross margins, which represent sales minus the cost of goods sold, are probably the best measure of long-term unit economics. The higher the gross margin, the more valuable each dollar of sales is to the company because it means that for each dollar of sales, the company has more cash available to fund growth and expansion.

old economy” businesses often have low gross margins. Growing wheat is a low-margin business, as is selling goods in a store or serving food in a restaurant.

Most of the valuable companies we’re focusing on in this book have gross margins of over 60, 70, or even 80 percent.

it’s not necessarily any easier to sell a low-margin product than a high-margin product.

Many blitzscalers, such as Amazon or the Chinese hardware makers Huawei and Xiaomi, deliberately price their products to maximize market share rather than gross margins. As Jeff Bezos is fond of saying, “Your margin is my opportunity

While it may seem like blitzscaling is a strategy that only works in “hot” markets, it can be successful under any market conditions. The key nuance is that a company’s rate of growth needs to be measured on a relative rather than absolute scale.

While blitzscaling requires risk taking, it doesn’t require unnecessary risk taking. Indeed, the higher level of risk associated with blitzscaling makes risk management even more valuable and important. As Yahoo! cofounder Jerry Yang told us in an interview for Reid’s Masters of Scale podcast, “All bold strategies have a risk. If you don’t see it, you’re flying risk-blind.

Because blitzscaling is—by definition—an inefficient use of capital, it only makes sense when speed and momentum are important. Blitzscaling is like the afterburners on a fighter jet that allow you to fly at double or triple normal speed but consume fuel at a shockingly high rate. You don’t just switch on the afterburners and never turn them off.

its market. Blitzscaling requires capital—whether from investors or from cash flow—to fund relatively inefficient growth. If investors are willing to act quickly and provide large amounts of capital, the risk that a competitor decides to blitzscale is higher.

The downside, of course, is that the cost of failure is much higher than if you proceeded with deliberate caution and waited for proof before making commitments. But this additional cost can be dwarfed by the potential benefits of achieving first-scaler advantage in a valuable winner-take-most or winner-take-all market.

one of the signature strategies for blitzscaling is rapid, parallel market development. When Airbnb made the decision to blitzscale, its chosen strategy was to rapidly expand from a single office in the United States to a score of offices around the world, especially in Europe. This kind of growth is highly inefficient—think of all the new knowledge and infrastructure and personnel an organization has to acquire to successfully open offices around the world—but it can allow a company to stand out from its competitors. It would have been more efficient for Airbnb to expand one country and one office at a time, refining its approach based on the lessons of each rollout, but that would have allowed its competitor Wimdu to be the faster mover. In other words, when it needed to grow from a forty-person company to a global company in a single year, Airbnb couldn’t afford to be cautious with its capital and focus on efficiency.

since transactions on today’s platforms are conducted through application programming interfaces (APIs) rather than person-to-person negotiations, they proceed swiftly, seamlessly, and in incredible volumes, all with barely any human intervention. If a platform achieves scale and becomes the de facto standard for its industry, the network effects of compatibility and standards (combined with the ability to rapidly iterate and optimize the platform) create a significant and lasting competitive advantage that can be nearly unassailable. This dominance lets the market leader “tax” all the participants who want to use the platform, much as levies were imposed in the bygone Republic of Venice. For example, the iTunes store takes a 30 percent share of the proceeds whenever a song, a movie, a book, or an app is sold on that platform. These platform revenues tend to have very high gross margins,

important, valuable companies that follow this pattern. One reason marketplaces are powerful is because they often tap into two-sided network effects. While it is difficult to create a successful marketplace from a cold start, the first marketplace that does manage to achieve liquidity—the ability for buyers and sellers to quickly and efficiently find a counterparty to conduct a transaction—becomes very attractive to both sides of the market. As buyers and sellers pour in, the marketplace becomes even more attractive to both parties, triggering a positive feedback loop that makes it very hard for new entrants to win any market share.

Another, less obvious benefit to this model is that once a subscription business achieves scale, the predictability of its revenue streams allows it to be more aggressive with long-term investments, since it isn’t obliged to maintain large cash balances to weather short-term variations in the business.

One of the most underrated and underappreciated proven patterns is the news feed. Facebook’s powerful network effects allow the site to attract its users, but its innovation of the news feed has made it a world-class business.

The best entrepreneurs don’t just follow Moore’s Law; they anticipate it. Consider Reed Hastings, the cofounder and CEO of Netflix. When he started Netflix, his long-term vision was to provide television on demand, delivered via the Internet. But back in 1997, the technology simply wasn’t ready for his vision

However, there was a technological innovation that would allow Netflix to get partway to Hastings’s ultimate vision—the DVD. Hastings realized that movie DVDs, then selling for around $20, were both compact and durable. This made them perfect for running a movie-rental-by-mail business.

DVD technology allowed Netflix to create a completely new business model. Rather than renting out individual movies and being charged exorbitant late fees if they failed to return the VHS tape in time, Netflix customers paid $20 per month for a subscription to “unlimited” movies—provided they checked out just one movie at a time. This allowed Netflix to eliminate Blockbuster’s widely loathed late fees and capture the powerful and certain revenue stream from the proven model of a subscription service. Netflix took off, and even went public as a DVD-by-mail service. But Hastings never lost sight of his ultimate vision for Netflix—on-demand television delivered via the Internet

When we first started raising money in 1997, we thought we’d be mostly streaming in 5 years,” Hastings told us when he visited our Blitzscaling class at Stanford. “In 2002, we had no streaming. So we thought that by 2007, it would be half our business. In 2007, we were still nowhere. So we made the same prediction. And this time we were wrong the other way—by 2012, streaming was 60% of our business.” It may have taken longer than Hastings expected, but Moore’s Law eventually came through for him.

Broadcast television succeeded by providing the same thing to all its viewers—a model driven by the technological innovation of broadcasting content via wireless signals and later coaxial cable. Netflix succeeds by providing a carefully personalized experience to each of its many viewers, giving it a huge advantage over its traditional television competitors. Moreover, Netflix produces exactly what it knows its customers want based on their past viewing habits, eliminating the waste of all those pilots, and only loses customers when they make a proactive decision to cancel their subscription

At a higher level of abstraction, successful scale-ups place more emphasis on adaptation than optimization

This emphasis makes sense in an environment where companies need to seek product/market fit for new and rapidly changing products and markets.

As we’ve discussed, key growth factors like distribution and network effects tend to provide disproportionate rewards to a company that is the first in its space to achieve critical scale. Being contrarian and right gives you a huge advantage because you get a head start on achieving scale.

As we’ve already seen, most great ideas look dumb at first. Being contrarian doesn’t mean that dumb people disagree with you; it means that smart people disagree with you!

The problem is that, by definition, business model innovation involves trying something that is new, and thus unproven!

The only time that it makes sense to blitzscale is when (whether for offensive or defensive reasons) you have determined that speed into the market is the critical strategy to achieve massive outcomes.

You don’t necessarily need to have solved your revenue model before deciding to blitzscale. In fact, a key element of blitzscaling is often the willingness of investors to fund growth before the revenue model is proven—after all, it’s pretty easy to fund growth after the revenue model is proven.

If the gross margins of this new opportunity are low, the market size has to be even bigger to make it a big opportunity. You have to know that the ultimate size of the prize is worth it.

Blitzscaling is unlikely to prove successful if another company has already achieved first-scaler advantage.