Jeff BussgangGeneral Partner, Flybridge and Senior Lecturer, HBS. Former entrepreneur. AI nerd.

9 - Blitzcaling vs steady experiments (by Donna Levin)

Name: 9 - Blitzcaling vs steady experiments (by Donna Levin)
Uploaded: 2020-12-01T12:15:48+00:00
Duration: 1 min 7 s
Channel: Jeff Bussgang
Description: Donna Levin contrasts blitzscaling (very rapid growth to capture network effects and reach critical mass quickly) with a slow, steady experiment-driven…

1 Dec 2020 · 1 min

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1:07

Donna Levin contrasts blitzscaling (very rapid growth to capture network effects and reach critical mass quickly) with a slow, steady experiment-driven approach that emphasizes proving unit economics and product-market fit before scaling. Levin notes blitzscaling suits marketplace/platform businesses with network effects but is capital-inefficient and risky; most ventures should test key assumptions and optimize unit economics first, then scale efficiently.

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Hey, let's have a quick conversation about blitzscaling versus Slow and steady experiments. So blitzscaling is when you need to move really really quickly because it's part of your competitive advantage. Think marketplace businesses, software companies and platforms that benefit from network effects. The speed is required because reaching that critical mass, it's your moat and it makes you valuable. You need those millions of people on your platform. The challenge is that blitzscaling is typically inefficient. It burns through a lot of capital because the notion is you're going to grow as fast as possible and you'll figure out later it's winner take all. In ltv, we've been heavily focused on study experience. Go nail it before you scale it. Test your key assumptions about your business. Make sure your unit economics are solid, you've achieved your product market fit, then you pour on the gas and course correct as necessary. We want you to scale as efficiently as possible. Very few companies or ventures lead themselves to blitzscaling.