As Munster recently wrote, Tesla’s difficulties last year, including the company’s alarming financial state then, are classic characteristics of a company that is blitzscaling. In a previous interview, Musk specifically noted that the Model 3’s “production hell” took him and Tesla to the edge. Tesla has exhibited the signs oft blitzscaling for years, as seen in Elon Musk’s bet-the-company strategies with the Model 3 ramp. This fits perfectly with Tesla, whose goal is to accelerate the world’s transition to sustainable energy while surviving in the hyper-competitive auto industry. Nevertheless, blitzscaling is one of the best techniques that a company could adopt if it is pursuing a very valuable prize and if the competition in its niche is intense. This strategy is incredibly dangerous, as the risks of failure are very high. Blitzscaling is jumping off a cliff and assembling the aircraft faster by strapping on and igniting a set of jet engines while still building the wings. Illustrating this point, Hoffman stated that starting a company is like jumping off a cliff and assembling a plane on the way down. With this strategy in place, traditional growth techniques such as careful planning, cautious investment, and a deliberate effort to solve all problems before moving forward get thrown aside. Companies that adopt this strategy prioritize high-speed growth over efficiency to become the first to reach a critical scale.
Veteran tech analyst Gene Munster notes that this is made possible by a strategy that Tesla has adopted, known as “blitzscaling.”īlitzscaling is a concept that was initially coined by Reid Hoffman of PayPal and LinkedIn fame. Today, the electric car maker is a trailblazer in the EV market, and it is poised to grow even more. Operating under Silicon Valley principles, Tesla has exhibited insane growth over the nearly 16 years it has been in business. To say that Tesla is moving fast is an understatement.
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