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Blitzscaling: The good, the bad, and the ugly

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  • Kuratko, Donald F.
  • Holt, Harrison L.
  • Neubert, Emily

Abstract

Today’s disruptive innovations are driving the creation of numerous billion-dollar startups. Venture capitalists focus on these potentially disruptive technology startups and fund them furiously, advancing their speed of growth. The idea is to scale fast and seek huge returns for investors. Terms that define this type of aggressive scaling have recently developed in Silicon Valley. Unicorn is defined as a venture with a value of $1 billion, while a decacorn describes startups with a value of $10 billion. Another recent term is blitzscaling: funding a venture for extremely fast growth and prioritizing speed over efficiency in an environment of uncertainty. While blitzscaling is being used heavily by investors in Silicon Valley, we look at exactly what comprises this new phenomenon and how it is used in practice. We examine the concept, its stages, and its prevalence before reviewing the different examples of how the strategy has been implemented for success (the good), cases of its failure in practice (the bad), and the extreme cases of ethical compromise by ventures (the ugly). From these cases, we draw specific lessons that, if understood and appropriately addressed, would help new ventures effectively implement the strategy.

Suggested Citation

  • Kuratko, Donald F. & Holt, Harrison L. & Neubert, Emily, 2020. "Blitzscaling: The good, the bad, and the ugly," Business Horizons, Elsevier, vol. 63(1), pages 109-119.
    • Handle: RePEc:eee:bushor:v:63:y:2020:i:1:p:109-119
    DOI: 10.1016/j.bushor.2019.10.002
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    References listed on IDEAS

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    1. Regan M. Stevenson & Donald F. Kuratko & Jared Eutsler, 2019. "Unleashing main street entrepreneurship: Crowdfunding, venture capital, and the democratization of new venture investments," Small Business Economics, Springer, vol. 52(2), pages 375-393, February.
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    Cited by:

    1. Maksim Belitski & Christina Guenther & Alexander S. Kritikos & Roy Thurik, 2022. "Economic effects of the COVID-19 pandemic on entrepreneurship and small businesses," Small Business Economics, Springer, vol. 58(2), pages 593-609, February.
    2. Shankar, Raj K. & Clausen, Tommy H., 2020. "Scale quickly or fail fast: An inductive study of acceleration," Technovation, Elsevier, vol. 98(C).
    3. Khanindra Ch. Das, 2023. "What Affects Startup Acquisition in Emerging Economy? Evidence from India," Journal of Emerging Market Finance, Institute for Financial Management and Research, vol. 22(2), pages 111-134, June.
    4. Kuckertz, Andreas & Scheu, Maximilian & Davidsson, Per, 2023. "Chasing mythical creatures – A (not-so-sympathetic) critique of entrepreneurship's obsession with unicorn startups," Journal of Business Venturing Insights, Elsevier, vol. 19(C).
    5. Kuratko, Donald F. & Neubert, Emily & Marvel, Matthew R., 2021. "Insights on the mentorship and coachability of entrepreneurs," Business Horizons, Elsevier, vol. 64(2), pages 199-209.
    6. Kuratko, Donald F. & Devin Burnell, & Stevenson, Regan & Neubert, Emily & Fisher, Greg, 2023. "Enacting entrepreneurial hustle," Business Horizons, Elsevier, vol. 66(2), pages 237-249.
    7. Tekic, Zeljko & Chemikhin, Andrei & Malyy, Maksim, 2024. "Market-first or technology-first? Exploring unicorns’ pathways to extreme valuations," Technology in Society, Elsevier, vol. 77(C).
    8. Audretsch, David B. & Belitski, Maksim & Theodoraki, Christina, 2024. "Micro and macro factors of firm scaling," Technological Forecasting and Social Change, Elsevier, vol. 202(C).
    9. Wimelius, Henrik & Sandberg, Johan & Olsson, Markus & Gunhaga, Martin, 2023. "Navigating the volatile world of digital entrepreneurship," Business Horizons, Elsevier, vol. 66(6), pages 789-803.
    10. Aaron J. Staples & Thomas P. Krumel, 2023. "The Paycheck Protection Program and small business performance: Evidence from craft breweries," Small Business Economics, Springer, vol. 61(3), pages 931-956, October.
    11. David B. Audretsch & Maksim Belitski & Rosa Caiazza & Erik E. Lehmann, 2020. "Knowledge management and entrepreneurship," International Entrepreneurship and Management Journal, Springer, vol. 16(2), pages 373-385, June.
    12. Iurkov, Viacheslav & Koval, Mariia & Zakaryan, Arusyak, 2023. "The role of network community characteristics for firms' rapid business scaling," Technological Forecasting and Social Change, Elsevier, vol. 196(C).
    13. Wood, Matthew S. & Scheaf, David J. & Dwyer, Sean M., 2022. "Fake it ‘til you make it: Hazards of a cultural norm in entrepreneurship," Business Horizons, Elsevier, vol. 65(5), pages 681-696.
    14. Donald F. Kuratko & David B. Audretsch, 2022. "The future of entrepreneurship: the few or the many?," Small Business Economics, Springer, vol. 59(1), pages 269-278, June.

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