Blitzscaling 01: Overview of the Five Stages of Blitzscaling

Executive Summary:

  • Greylock introduced the co-instructors and the focus of the class on building large, transformational companies at global scale, beyond just starting up.
  • The class will examine the importance of networks, scaling revenue/customers/organizations, and the different stages of company scale (Family, Tribe, Village, City, Glue Factory) based on LinkedIn's journey as an example.
  • Key principles at the early Family stage include focusing on product, people, and ensuring you can pay employees, while being willing to do things that don't scale initially to get traction.

Meeting Notes:

Introduction and Context

  • Greylock introduced the 3 co-instructors - Alan (co-founder of LinkedIn), Chris Yeh (co-author of "The Alliance" book), and John Lilly (former CEO, partner at Greylock)
  • This class builds on 3 traditions: 1. Business for Computer Scientists course at Stanford, 2. Entrepreneurship courses at Stanford, 3. CS183C by Peter Thiel (book "Zero to One") and Sam Altman (Y Combinator startup school)
  • The focus is on how to build large, transformational companies at global scale, going beyond just starting up

Importance of Networks and Scaling in Silicon Valley

  • Networks and connections are critical for success, especially in Silicon Valley's ecosystem
  • There is an accelerating trend of impactful, global companies emerging from Silicon Valley
  • Scaling revenue, customers, organizations is key - this is what makes Silicon Valley unique
  • The class will examine the strategies, risks, opportunities and decisions involved in scaling

Categorizing the Stages of Company Scale

  • Outlined 5 stages of scaling: Family (3-15 employees), Tribe (15-100), Village (100s), City (1000s), Glue Factory (10,000+)
  • Different aspects like people, products, go-to-market evolve at each stage
  • Used LinkedIn's journey as examples to illustrate the stages

Key Principles at the Family Stage

  • Focus on: Product - Iterating and getting product-market fit, People - Hiring the initial team, getting employees to join, Ensuring you can pay employees
  • Do things that don't scale initially to get traction (e.g. Airbnb going door-to-door, hiring photographers)
  • Don't try to pre-solve every problem, learn and adapt quickly
  • Greylock's Advice: "If you're not embarrassed by your first product release, you've released too late"

Key Takeaways from LinkedIn's Scaling Journey (example shared by Greylock)

  • In the Family stage, had a single product idea, hired friends/former colleagues, ran lean operations
    • Shifted to Tribe stage around 30-40 employees, added functions like customer service, sales, ops
    • At ~100 employees, broke into 5 R&D groups to explore new product areas while maintaining core
    • Brought in experienced executive hires for enterprise sales
    • Founder/CEO transitions (Reid -> Greylock -> Reid again as examples)
    • Village stage: Formalized processes, strategy under new CEO Jeff Weiner
    • City stage: Scaled to 8500+ employees, expanded to 27 countries, customer growth from overseas
  • Greylock emphasized there is no single clean path, quotes like "If you're not embarrassed by your first product, you've launched too late" were more relevant early on
  • The early focus areas for a startup should be product, people and ensuring you can pay employees. Other concerns like competition, analytics, pricing strategy are lower priority initially.