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144

Part IV: Management Innovation

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Yeh, C. and Hoffman, R. (2018). Part IV: Management Innovation. In Yeh, C. and Hoffman, R. Blitzscaling. HARPER COLLINS UK, pp. 144-239

147

You’re also adding qualitatively different kinds of people to the team. 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.

lol

—p.147 by Chris Yeh, Reid Hoffman 4 months ago

You’re also adding qualitatively different kinds of people to the team. 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.

lol

—p.147 by Chris Yeh, Reid Hoffman 4 months ago
179

The reality is that many start-ups are like pirates: they lack formal processes and are willing to question and even break rules. This flexibility is critical in the early stages of building a great company. Pirates don’t convene a committee meeting to decide what to do when an enemy ship is approaching—they act quickly and decisively, and are willing to take risks because they know that the default outcome is death.

sooo dramatic

—p.179 by Chris Yeh, Reid Hoffman 4 months ago

The reality is that many start-ups are like pirates: they lack formal processes and are willing to question and even break rules. This flexibility is critical in the early stages of building a great company. Pirates don’t convene a committee meeting to decide what to do when an enemy ship is approaching—they act quickly and decisively, and are willing to take risks because they know that the default outcome is death.

sooo dramatic

—p.179 by Chris Yeh, Reid Hoffman 4 months ago
180

One of the key ways to assess whether you’re being an ethical pirate or a sociopath is to ask, “Am I trying to change the rules for everyone, or just trying to get away with a personal exemption?” At PayPal, we broke the rules, but we did so because we were working toward a better set of rules for everyone. We felt that our actions were ethical because while we could technically have been in violation of the letter of certain banking regulations (we consistently argued that we weren’t a bank, but not everyone agreed!), we believed that in the long run we would be in compliance once we convinced the world to change the rules, and that the world would be better off as a result. History demonstrates that we were right. The various parties that were upset by our so-called pirate mentality—eBay, banks, regulators—all see the value of PayPal today. By changing the rules for everyone, we helped pave the way for other payment companies like Square and Stripe, which have improved the world of mobile payment even further.

really??????

—p.180 by Chris Yeh, Reid Hoffman 4 months ago

One of the key ways to assess whether you’re being an ethical pirate or a sociopath is to ask, “Am I trying to change the rules for everyone, or just trying to get away with a personal exemption?” At PayPal, we broke the rules, but we did so because we were working toward a better set of rules for everyone. We felt that our actions were ethical because while we could technically have been in violation of the letter of certain banking regulations (we consistently argued that we weren’t a bank, but not everyone agreed!), we believed that in the long run we would be in compliance once we convinced the world to change the rules, and that the world would be better off as a result. History demonstrates that we were right. The various parties that were upset by our so-called pirate mentality—eBay, banks, regulators—all see the value of PayPal today. By changing the rules for everyone, we helped pave the way for other payment companies like Square and Stripe, which have improved the world of mobile payment even further.

really??????

—p.180 by Chris Yeh, Reid Hoffman 4 months ago
196

This means talking with other smart people, often, so that you can learn from their successes and failures. It’s usually easier and less painful to learn from another’s mistakes than from your own. When I need to learn about a new subject, I’ll definitely devour some books on the topic, but I almost always supplement this reading by seeking out dialogue with leading experts in the field. Brian Chesky at Airbnb, another amazing learning machine, does something similar, seeking advice from mentors like Sheryl Sandberg and Warren Buffett. Brian told our class at Stanford, “If you find the right source, you don’t have to read everything. I’ve had to learn to seek out the experts. I wanted to learn about safety, so I went to George Tenet, the ex-head of the CIA. Even if you can’t meet the best, you can read about the best.” Brian lives this advice; he got many of his ideas by assiduously poring over biographies of great entrepreneurs like Walt Disney.

hhahahhaha

—p.196 by Chris Yeh, Reid Hoffman 4 months ago

This means talking with other smart people, often, so that you can learn from their successes and failures. It’s usually easier and less painful to learn from another’s mistakes than from your own. When I need to learn about a new subject, I’ll definitely devour some books on the topic, but I almost always supplement this reading by seeking out dialogue with leading experts in the field. Brian Chesky at Airbnb, another amazing learning machine, does something similar, seeking advice from mentors like Sheryl Sandberg and Warren Buffett. Brian told our class at Stanford, “If you find the right source, you don’t have to read everything. I’ve had to learn to seek out the experts. I wanted to learn about safety, so I went to George Tenet, the ex-head of the CIA. Even if you can’t meet the best, you can read about the best.” Brian lives this advice; he got many of his ideas by assiduously poring over biographies of great entrepreneurs like Walt Disney.

hhahahhaha

—p.196 by Chris Yeh, Reid Hoffman 4 months ago
204

Consider the example of PayPal. While PayPal was a great success, the company was badly managed—and I write that statement as one of its senior managers. We did a few good things, such as making sure that every employee had a clear primary job and staying focused when working on certain important projects, but for the most part PayPal’s management was a lack of management. There were no one-on-one career development conversations with employees. There was no work done to form teams beyond simply picking who was going to belong to them. The few rules we had were more about individual incentives rather than team management. For example, when people were late to a meeting, the last person to arrive was fined $100 to enforce discipline. Yet while we knew meetings were important, we didn’t designate a note taker to capture key points and action items, a common and basic practice in Silicon Valley.

wow

—p.204 by Chris Yeh, Reid Hoffman 4 months ago

Consider the example of PayPal. While PayPal was a great success, the company was badly managed—and I write that statement as one of its senior managers. We did a few good things, such as making sure that every employee had a clear primary job and staying focused when working on certain important projects, but for the most part PayPal’s management was a lack of management. There were no one-on-one career development conversations with employees. There was no work done to form teams beyond simply picking who was going to belong to them. The few rules we had were more about individual incentives rather than team management. For example, when people were late to a meeting, the last person to arrive was fined $100 to enforce discipline. Yet while we knew meetings were important, we didn’t designate a note taker to capture key points and action items, a common and basic practice in Silicon Valley.

wow

—p.204 by Chris Yeh, Reid Hoffman 4 months ago
205

We were also fortunate in our timing. One thing that holds teams together in the absence of management is an opportunity to win. After the dot-com bust began, a lot of tech companies were failing, but PayPal still had a chance to succeed. All you had to do was to look at the chart showing the continuing rise in daily transaction volume! So our people put up with more than they would normally put up with because they wanted to win and liked being part of a team of high-powered, high-IQ players.

—p.205 by Chris Yeh, Reid Hoffman 4 months ago

We were also fortunate in our timing. One thing that holds teams together in the absence of management is an opportunity to win. After the dot-com bust began, a lot of tech companies were failing, but PayPal still had a chance to succeed. All you had to do was to look at the chart showing the continuing rise in daily transaction volume! So our people put up with more than they would normally put up with because they wanted to win and liked being part of a team of high-powered, high-IQ players.

—p.205 by Chris Yeh, Reid Hoffman 4 months ago
214

At the time, potential Series A investors wanted to see a business model that showed how LinkedIn would get to profitability. I told potential investors that we weren’t going to generate revenue until after the next round of funding, and that therefore it shouldn’t matter to them. They insisted anyway, so the team and I generated a financial model that included revenue sources. I don’t even remember what we put in it! Rather than waste weeks on it, we simply set aside a single evening, drank a couple of glasses of wine, and put together the model (I might have been a little miffed at having to spend even a single evening, but it was pretty good wine, so it wasn’t a total waste).

banal story but i like the idea of someone dropping acid or ayahuasca or shrooms and putting together a totally nonsensical [and yet successful] pitch deck or something

—p.214 by Chris Yeh, Reid Hoffman 4 months ago

At the time, potential Series A investors wanted to see a business model that showed how LinkedIn would get to profitability. I told potential investors that we weren’t going to generate revenue until after the next round of funding, and that therefore it shouldn’t matter to them. They insisted anyway, so the team and I generated a financial model that included revenue sources. I don’t even remember what we put in it! Rather than waste weeks on it, we simply set aside a single evening, drank a couple of glasses of wine, and put together the model (I might have been a little miffed at having to spend even a single evening, but it was pretty good wine, so it wasn’t a total waste).

banal story but i like the idea of someone dropping acid or ayahuasca or shrooms and putting together a totally nonsensical [and yet successful] pitch deck or something

—p.214 by Chris Yeh, Reid Hoffman 4 months ago
224

A strong commitment to a culture will sometimes mean passing on hiring “A players” who don’t fit that culture. At PayPal, for example, Max Levchin instituted a problem-solving test as part of the hiring process for joining our engineering group. He wanted a culture that was focused on solving big-picture problems, not simply writing good code. If a person was a great programmer but didn’t have a problem-solving orientation, we didn’t hire him or her. At LinkedIn, we tried to recruit people who were hardworking but also family-oriented. Our founding team members had families, and we wanted to establish the norm that employees could go home to have dinner with their families (and then work remotely later in the evening). Candidates who believed that a start-up needed everyone at the office until ten o’clock every night would inevitably frustrate colleagues and themselves, so they were screened out. Conversely, candidates who wanted to work a nine-to-five job would also be screened out, no matter how talented.

lmao

—p.224 by Chris Yeh, Reid Hoffman 4 months ago

A strong commitment to a culture will sometimes mean passing on hiring “A players” who don’t fit that culture. At PayPal, for example, Max Levchin instituted a problem-solving test as part of the hiring process for joining our engineering group. He wanted a culture that was focused on solving big-picture problems, not simply writing good code. If a person was a great programmer but didn’t have a problem-solving orientation, we didn’t hire him or her. At LinkedIn, we tried to recruit people who were hardworking but also family-oriented. Our founding team members had families, and we wanted to establish the norm that employees could go home to have dinner with their families (and then work remotely later in the evening). Candidates who believed that a start-up needed everyone at the office until ten o’clock every night would inevitably frustrate colleagues and themselves, so they were screened out. Conversely, candidates who wanted to work a nine-to-five job would also be screened out, no matter how talented.

lmao

—p.224 by Chris Yeh, Reid Hoffman 4 months ago
239

In Lewis Carroll’s classic book Through the Looking-Glass, the Red Queen tells Alice, “Now, here, you see, it takes all the running you can do, to keep in the same place. If you want to get somewhere else, you must run at least twice as fast as that!” Sometimes blitzscaling a company might feel a bit like running as hard as you can simply to end up in the same place. But the difference between our world and the Red Queen’s is that blitzscaling is a race to build things that make the world a better place. Whether your new market will be machine learning, or a new kind of wireless computing, or something that hasn’t been invented yet, there’s a word for the by-product of blitzscaling: “progress.”

ah yes

—p.239 by Chris Yeh, Reid Hoffman 4 months ago

In Lewis Carroll’s classic book Through the Looking-Glass, the Red Queen tells Alice, “Now, here, you see, it takes all the running you can do, to keep in the same place. If you want to get somewhere else, you must run at least twice as fast as that!” Sometimes blitzscaling a company might feel a bit like running as hard as you can simply to end up in the same place. But the difference between our world and the Red Queen’s is that blitzscaling is a race to build things that make the world a better place. Whether your new market will be machine learning, or a new kind of wireless computing, or something that hasn’t been invented yet, there’s a word for the by-product of blitzscaling: “progress.”

ah yes

—p.239 by Chris Yeh, Reid Hoffman 4 months ago