# 15: “Blitzscaling” Is Not Our Story (Part I)
Story behind the Passage
Today I am getting a bit serious. I am already warning you — some people in the German startup scene might get pissed off. But since you know that I am totally into startups and the impact they create in our culture, you can be assured that pissing people off is not my main motivation. Being critical in a constructive way is a sign of care, not one of neglect. I want to share what I think and there are many things that other people think about the future of entrepreneurship in Germany, which simply make no sense to me.
The reason why I am choosing this topic today is because I just took a glimpse of a live show on TV called “The Pitch.” It was the first time in Germany that the three candidates for the chairmanship of the Christian Democratic Party (CDU) were asked to pitch their agenda in front of the party’s youth organization — and in public, obviously. To make this even clearer — here is how the First Public TV Station (ARD) is describing the event on their website. The very first paragraph deals with the definition of pitching:
“In golf, pitching means hitting the ball over a short distance in order to reach the green as quickly as possible to then hole the ball. In baseball, the art of the pitcher, i.e., the person throwing the ball, is to pitch in a way that the ball is hard to beat. In marketing, a pitch is a short presentation. The person with the best pitch wins the deal.” — Schwietzer, my translation
These lines perfectly reflect what my article is going to be about: the ensuing Americanization of culture and democracy in a country that is fiercely raging against “America”/the U.S. This sounds like a paradox? Strike! That is exactly what it is and I am writing about it today in order to simply point out how paradoxical it is and how widespread. This also encompasses the topic ofstartups, their success factors, and their actual role in the economy of the nation.
The passage above is from Reid Hoffman’s book Blitzscaling: The Lightning-Fast Path to Building Massively Valuable Companies. I learned about this book from a great startup founder in Berlin who happens to be a big reader. I mentioned him before in one of my posts. As always, before ordering the book, I checked out Reid Hoffman’s background and found many parallels to my own life. No, I am not a billionaire like him. But he once was on the way to becoming a scholar but wanted to create large-scale impact in the world which is why he consciously decided to become an entrepreneur.
Large-scale impact obviously is what he talks about in Blitzscaling. The book basically teaches founders how they can become ‘real’ startups in the original sense of the U.S. definition, i.e., how they can achieve exponential growth. The passage is from one of the closing chapters of the book. Different from my usual practice, I am not going to discuss individual lines today. I think, the passage is quite clear, given the fact that “blitzscaling” is quite explicit already. Today, I am going to focus on the larger ramifications of whether or not a concept like blitzscaling makes sense for Europe and Germany in particular.
Before I really start with this, I need to make sure that you, dear reader, are clear about my perspective. I am not writing as a startup business pro, an economist, or a sales consultant. I am writing as the “story expert,” at best, and all I am going to share are my subjective thoughts on this. When saying “this,” I do not just mean blitzscaling as a concept, I mean the cultural implications this has. This will also show you why I started out by referring to The Pitch show today.
My Learnings
“Responsible Blitzscaling” If you start a TV program blurb with a definition of the title of the (casting) show , that tells you one thing right away: The title is from a different language and probably culture. Otherwise, it would not need any “translation.” In this case, the origin of the concept is quite clear. All the sports mentioned in the definition are popular in the U.S. — i.e., baseball and golf (I do not care right now where exactly they were once invented. This is not going to be a sports historical study.). To make a long story short: It is quite clear that The Pitch is based on the U.S. example of election campaigns, and so are the TV battles between candidates for the federal elections in Germany by now. In other words: We are copying the U.S. FULL STOP
By the way, this is what is known as “Americanization” and it is by far not a new phenonenon. This trend of adopting American values, symbols, and norms has been going on for decades — not just in Germany but in the whole of Europe and Asia. First, Americanization could be considered a good thing — it brought the world hamburgers, hotdogs, and Disneyland. Only fairly recently in the past two decades or so, the concept and the political agenda that goes along with it have become quite challenged. Thousands of authors and scholars have written about it and critiqued its impact on European social institutions and society. Oooops, did I just miss to mention the name of the current U.S. president in this context? Well, maybe not that important…
I know, I am putting your patience to the test because there still seems to be no connection to the Blitzscaling book and the topic of responsible growth. I am getting there now and it is actually very easy to understand. Blitzscaling, i.e., the idea to use the full force of network effects that the digital technology provides to scale your business to the max, is rooted in U.S. startup history and culture. It is based on the DNA of Silicon Valley and the glorious emergence of technological giants like IBM, Apple, and Google — to only name a few. So, why would this not work in Germany and/or Europe according to my reading?
Well, first of all, we see that it is not working. Otherwise, Europe would already have as many unicorns as the U.S. The truth is, China is way ahead of Europe, with the U.K. leading among European countries. Ooooops again, I forgot about Brexit… In any case, it is not a mere stereotype that European companies, including German ones, are not blitzscaling as quickly and therefore do not reach the “massive” size that Hoffman talks about. The major reason why startups aim at growing so fast is not merely the goal of becoming a unicorn for unicorn’s sake. It is because size equals defensibility in a highly competitive environment. Consequently, the common concern that rules the public discourse on startups in Germany is: How can we achieve this massive growth for as many companies as possible?
Now, the story is getting more and more interesting. But not in the way that you might assume. The question of “how” growth can be achieved is something business experts and politians are dealing with extensively already — with little success. The first question that I find a lot more interesting is: Why should we even want to grow that fast? Again, this question is important as well but also being worked on already. You already find much criticism on this growth paradigm on the web and in public discourse. After all, the entire sustainability debate and all the research done on the Circular Economy is in line with this anti-growth paradigm. But I want to take this even one step further by asking:
When do we start telling our own story of digital entrepreneurship?
By raising this question, I am also implicitly answering the question on the growth paradigm — but from a different perspective than is commonly done. I do think that startups will always be about growth first, at least in the early stage. Above all, this is the major achievement of platform businesses that the digital technology facilitated. However, there is still a difference between saying that growth, even exponential growth, is important and always calling out for the next unicorns. So, what is that difference?
Simple answer: The cultural, social, and historical narrative. When I say “narrative,” I mean more than “story.” I mean a bunch of stories that share common features and thereby form a coherent framework in people’s minds. The U.S. is the nation in which people rise from “rags to riches” and turn “from dishwasher to millionaire” within the blink of an eye. Yes, this is how these stories get told sometimes. Even if that might not be true, for sure, this myth of becoming rich over night has a cultural connotation that is very American in nature. It is part of the reason why the U.S. is known as the “Land of Opportunity.” And this founding narrative resonates in everyday practices and in individual belief sets. And these individual mindsets in turn decide over how founders approach the implementation of their vision and what kind of support they get from investors. If this is the American part of the global startup tale — what about Europe and Germany?
To make things easier, I am just going to focus on Germany now. Yes, Europe obviously has a shared history but, as we know, the age of a United Europe that speaks in one voice has not arrived yet (no, I am not going to talk about how this kills thousands of refugees in small boats and in camps everyday). And this diversity is also reflected in different cultural patterns in startup communities. As far as Germany is concerned, however, the country has not been famous for a “dishwasher to millionaire” paradigm. Yes, we also had our “miracle,” i.e., the German “Wirtschaftswunder” after recovering from World War II. But here is the difference: The Wirtschaftswunder is the story of the joint efforts by many people (including women), patience, and hard work. It is the story of how successful small- and medium-sized companies survived, recovered and newly emerged to create prosperity.
Surely, all these typical attributes of German business culture, including accurateness, discipline, and straightforward conversation, do not run counter to the dishwasher story in the U.S. This is not what I am saying (and I would have to say a lot more, actually, to back up this argument of the different narratives with comprehensive evidence). What I just want to highlight in this short overview here is that the blitzscaling approach simply does not fit into our narrative. So, why do we try so freakingly hard to make it fit? Why do we waste so many investments and federal aid money to create unicorns that were invented across the Atlantic? Can we not breed our own ‘horses’?
Yes, this is starting to sound very anti-Americanist and very nationalist. That is totally opposed to everything I stand for. I am in fact very American in many ways. But I am also very German in some other ways, even though I came to neglect this at a certain point. Right now, I am convinced, however, that the story frame we have of the startup present and future is a major problem — not the story itself as it is being written on a daily basis by hundreds of startup ecosystems across the nation. But these are exactly the locations where one can best encounter the questionable and partly blind adoption of the ‘wrong’ story with the right intention. Let me be more specific.
If you take Berlin, for example, the city can undoubtedly be called one of the startup capitals of Europe, even the world. It is international, diverse, creative, innovative — all these attributes that are common when speaking of digital hotspots. The point is: All these hotspots have one thing in common: They copy. And what do they copy? Well, take a guess. Which language do people speak there? (English) Which car takes them from A to B? (Uber) Which city does Berlin like to compare itself with? (NYC)…. Do you need more examples to get the point? This reminds me of a quotation which you probably know from the business world:
“Good artists copy, great artists steal.” — Pablo Picasso
In the short startup history of Germany, we of course have some people that are particularly famous for copying business models 1:1 from the U.S. (e.g., the Samwer brothers). I am saying ‘copying’ because I do not think they were able to “steal” in the artistic way described by Picasso, even though they made quite a lot of money. What I am trying to get at, however, is that most of the startup world is currently still copying from the U.S. without even being close to the stealing stage . Otherwise, we would not be talking about unicorns, blitzscaling, and Silicon Valley all the time. We would instead be talking about taking the U.S. as a rich source for our ideas to then come up with our own — even better ones.
Eventually, what I am suggesting with all this is an entirely new perspective of looking at what we (Germany, Europe) have to build instead of chasing after an enemy that we explicitly reject (U.S.) but still embrace. The message that I want to send out is that we need to tell and write our own “startup” stories by realizing that startup might mean something different here. It is not up to me to define this because nobody can do that on paper. Still, it is a necessary step towards stopping the present trend of designing our own stories based on the story frames of Silicon Valley. Remember, the frame has a huge impact on the story therein. And copying badly, e.g., by mimicking the wrong role models, still ends up fake.
Berlin is not NYC or San Francisco. We need to come up with our own startup stories just like we have our own history of war, poverty, the economic miracle, the Cold War, and reunification. When I say “our own,” I mean different from any U.S. prototype — in our minds. Blitzscaling and pitching can make sense, but they should not be the authors of the story — not in business and not in politics. As long as we neglect A but still want A, we will always be unsatisfied with A. If we accept that A is cool but that we live in B and that B is already successful in its own way — then we are on the right track to fully unfolding our own potential to create C. This might never bring as many unicorns to the world, but we will not even want this anymore. And there is one hint by Hoffman as to why we would not even want it: responsibility.
Read Part II tomorrow…
Reflection Questions
1) Imagine you are in the third year of your venture. Last year was the first year in which you surpassed the 3 million EUR sales line. You are expecting to at least double sales this year. But your CFO is reminding you that just doubling sales is not in line with what your startup mentor in Silicon Valley tells you. He insists on exponential growth. What do you do?
2) What are your pitching experiences so far? Do you think that pitching as a practice in different fields is culture-specific?
3) Do you have a role model among startup founders? Where is he/she from?
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