When LinkedIn co-founder and Greylock partner Reid Hoffman first coined the term “blitzscaling,” he kept it simple: It’s a concept that encourages entrepreneurs to prioritize speed over efficiency during a period of uncertainty. Years later, founders are navigating a pandemic, perhaps the most uncertain period of their lives, and Hoffman has a clarification to make.
“Blitzscaling itself isn’t the goal,” Hoffman said during TechCrunch Disrupt 2021. “Blitzscaling is being inefficient; it’s spending capital inefficiently and hiring inefficiently; it’s being uncertain about your business model; and those are not good things.” Instead, he said, blitzscaling is a choice companies may have to make for a set period of time to outpace a competitor or react to a pandemic rather than a route to take from idea to IPO.
That doesn’t mean startups should avoid prioritizing breakneck speed, especially in industries like fintech and edtech, where the pandemic spotlighted a lot of potential. Instead, Hoffman thinks the pandemic’s real impact on his definition is that “the benchmark for what you may need to do in order to outpace your competitors to scale in an ecosystem may have changed.”
A lot of new money
Hoffman’s broadened view of blitzscaling blends well with his firm’s recent announcement of a $500 million seed fund. The close came weeks after Andreessen Horowitz closed its own $400 million seed fund.
Greylock claims that its new fund is “the largest pool of venture capital dedicated to backing founders at one,” and explicitly said that it is “willing to write large seed checks at lean-in valuations, which gives companies more runway to hit milestones without taking on additional dilution.” It’s fair to say that Greylock’s checks could help seed-stage startups afford to blitzscale while still prioritizing runway and other business-oriented resources.