Masters of Scale
Authors: Reid Hoffman, June Cohen, Deron Triff, Reid Hoffman, June Cohen, Deron Triff
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Overview
In Masters of Scale, we share surprising truths about how companies grow from zero to a gazillion, based on our popular podcast featuring in-depth interviews with iconic business leaders. This book isn’t just a collection of those insightful conversations, it identifies ten key themes to guide you through the entrepreneurial journey—from that initial spark of an idea to some of the surprising early-stage challenges to the daunting tasks of scaling a team and navigating a crisis. For anyone bringing something new into the world, this book provides guidance, inspiration, and a roadmap for reaching scale.
You’ll learn from some of the most iconic entrepreneurs of our time, including Bill Gates, Mark Cuban, Starbucks’ Howard Schultz, Netflix’s Reed Hastings, Apple’s Angela Ahrendts, Google’s Eric Schmidt, and many others. In their struggles and triumphs, their wins and losses, you’ll find your own story. You’ll learn why so many great ideas are initially met with resistance, how doing things that don’t scale can set you up for dramatic scale later on, why a company’s culture is the single most important thing to build from day one, why the best business leaders treat their customers as their scouts, and why, in a world of constant change, you need to get comfortable with being uncomfortable.
In a time of constant change and uncertainty, the world urgently needs a new generation of scale entrepreneurs—those willing to pursue audacious ideas and tackle ambitious challenges with fresh solutions. We hope this book provides you with the mindset, knowledge, and insights to help you achieve your greatest goals.
This book is written for entrepreneurs of all types, including early-stage founders, fast-growth CEOs, product leaders, and change agents. It’s for anyone who aspires to bring something new into the world and reach scale. While many of the examples come from the world of business, these principles apply equally to nonprofits, activists, creatives, and movement leaders of all types.
This book builds upon principles from my previous books: The Start-up of You, about adapting to the future, investing in yourself, and transforming your career, and The Alliance, about managing talent in the networked age, as well as the concept of “blitzscaling” — the pursuit of rapid growth by prioritizing speed over efficiency, even in the face of uncertainty—introduced in my book Blitzscaling.
Book Outline
1. Getting to No
Great ideas frequently challenge conventional thinking and are met with resistance, but this resistance can be a valuable signal of an idea’s potential for disruption and outsized impact. Embracing “no” and seeking out honest feedback, especially in the early stages, can help refine an idea and identify potential pitfalls, sharpening the founder’s focus on who their core users are and aren’t, and how the competition might think.
Key concept: The best, most scalable ideas are often the ones that seem the most implausible.
2. Do Things That Don’t Scale
Scaling starts small. The initial phase of a startup is a unique opportunity to define and refine your product through direct feedback from a small group of users. This means getting your hands dirty with tasks that seem insignificant at the time, but which can determine your company’s future trajectory: coding, designing, onboarding users, personally answering support calls, even living with your early users to gain deep insight into their needs. It’s about building something that a small cohort of users will truly love—and if they love it, hopefully millions will, too.
Key concept: “Do Things That Don’t Scale.”
3. What’s the Big Idea?
Big ideas often come from a place of personal experience or a deep understanding of a particular problem. They emerge from asking yourself, “What do I know?” and “Who do I know?” and by having a bias for action to move on the idea when you find it. Moreover, you don’t necessarily need all the traditional components of success—an MBA, funding, even lightning to strike—what matters is cultivating the entrepreneurial mindset of curiosity, bias to action, collaboration, and grit.
Key concept: “If you’re starting something new and people don’t call you crazy,’ she says, ‘then you’re probably not thinking big enough.”
4. The Never-Ending Project: Culture
Company culture isn’t something that just happens, it’s something you build—intentionally—starting from day one. It’s more than just perks or a mission statement; it’s about establishing a shared sense of purpose and values that permeates every aspect of the company, from how decisions are made to how employees interact with one another and with customers. And it’s about protecting and strengthening those values as you scale up, even as hiring new employees en masse can make that task more challenging.
Key concept: Culture is a living, breathing thing—the context you set for your employees to work at their best.
5. Growing Fast, Growing Slow
There’s no ideal pace of growth. For many startups, speed is of the essence—but there are also times when patience is even more important. Knowing when to lean in and when to sit back, when to take extraordinary risks and when to move deliberately, is key to success. This balancing act influences fundraising strategy, partnerships, organizational structure, and culture.
Key concept: Maintaining that fast/slow balance can be tricky: It’s risky to go too fast, but going slow is often even more dangerous for a startup, as it can starve you out of the resources you need to grow.
6. Learn to Unlearn
To succeed at scale you not only have to acquire new knowledge and skills, but often you have to unlearn—to cast off old ways of thinking and operating. The assumptions, strategies, and even skills that brought you success in the past may no longer be relevant as markets change, competition increases, and industries evolve. Especially in a fast-growing organization, the adage applies: “What got you here, won’t get you there.”
Key concept: Learning to unlearn is the hidden mindset for scale.
7. Watch What They Do, Not What They Say
To understand your customers, you need more than surveys and focus groups. You need to directly observe how people interact with your product—watch what they do, not just what they say they’ll do. That’s how you uncover hidden needs and opportunities, and avoid going down a path your customers may not actually follow. You have to be willing to follow them wherever they lead you, and even let them ‘hijack’ your product and use it in ways you hadn’t intended. Sometimes, your customers will reveal a better way.
Key concept: Customers don’t always do what they say.
8. The Art of the Pivot
Deviating from the original plan to try something related but different is sometimes necessary for survival. Pivots can be driven by changes in the marketplace, the rise of a new opportunity, or a deeper understanding of a product’s potential. The closer you look at successful startups, the more you realize that many of them began as something completely different. The key is recognizing when it’s time to pivot-and then bringing people along with you to move in a new direction.
Key concept: The art of the pivot
9. Lead, Lead Again
Leaders must create a consistent drumbeat for their organizations-a unifying vision and values around which a company can rally. This means establishing a direct human connection with your team and effectively communicating a compelling vision that gives people a sense of purpose. It also involves nurturing a culture that recognizes and rewards not just what people achieve, but how they achieve it—especially during times of rapid change and uncertainty.
Key concept: Managers tell people what to do. But leaders inspire them to do it.
10. The Trojan Horse
A company’s mission is an opportunity to do something good in the world, beyond the main business objective. This social mission doesn’t have to be an add-on feature; if you’re strategic about it, that purpose can, and should, become the beating heart of your business, driving not only social impact but also innovation, growth, and long-term success. The best scale entrepreneurs think about these twin questions—‘How do I do good?’ and ‘How do I do good business?’—from day one.
Key concept: Every successful company is like a Trojan horse carrying the founder’s second purpose forward.
Essential Questions
1. If scaling is not just about getting bigger, but about getting better, what makes an idea truly scalable?
Scaling isn’t simply about growing bigger, it’s about growing better. The most implausible ideas often have the greatest potential to change the world, and those ideas are the ones most likely to be met with initial resistance. Embracing that resistance and seeking feedback can reveal crucial insights, shaping your focus on your true users and differentiating your product. This can even involve rethinking what you know to be true, adapting to changes in the marketplace, and venturing into unfamiliar territory. The ability to unlearn, to cast off old assumptions and be open to new possibilities, is a key ingredient for reaching scale.
2. Why is it better to have 100 people love your product than a million people ‘kind of’ like it?
The importance of focusing on the few passionate users who love your product cannot be overstated. In the early days of building something new, it’s more valuable to have 100 people who truly love your product than a million who merely like it. These early users are your best source of feedback, the foundation for your viral loop. By directly engaging with them, one-on-one, you can uncover what they love and how you can make the experience even better. This can mean stepping outside of your comfort zone—literally, in some cases, as Brian Chesky demonstrated with his early Airbnb home visits. You must handcraft your way into their hearts.
3. If you’re building a culture for scale, what are the essential elements of a company culture that supports rapid growth?
Company culture is the living expression of a company’s purpose and values, shaping not only how people work but who gets hired—and fired. Unlike corporate cultures built on process, the most effective cultures are built for scale, able to adapt and evolve as the company grows. The best way to build an adaptable culture is to hire people who embody those values and are committed to upholding them. And as the company expands, it’s essential to ensure that the “why” behind the company’s purpose is understood by everyone, from the front-line employees to senior leadership.
4. Why is company culture neither something that can be ignored nor something static?
There are two common mistakes many founders make: ignoring culture altogether or treating it like a set of commandments. Culture is neither something that can be ignored nor something static that can be set in stone. It’s a living, breathing thing, constantly evolving and adapting. It’s about creating the conditions in which people can do their best work, a context grounded in a shared sense of mission. And just as important, it’s about being clear on which behaviors and qualities are essential for success and which are not permitted. By establishing clear values and norms, you create a foundation that can support growth.
1. If scaling is not just about getting bigger, but about getting better, what makes an idea truly scalable?
Scaling isn’t simply about growing bigger, it’s about growing better. The most implausible ideas often have the greatest potential to change the world, and those ideas are the ones most likely to be met with initial resistance. Embracing that resistance and seeking feedback can reveal crucial insights, shaping your focus on your true users and differentiating your product. This can even involve rethinking what you know to be true, adapting to changes in the marketplace, and venturing into unfamiliar territory. The ability to unlearn, to cast off old assumptions and be open to new possibilities, is a key ingredient for reaching scale.
2. Why is it better to have 100 people love your product than a million people ‘kind of’ like it?
The importance of focusing on the few passionate users who love your product cannot be overstated. In the early days of building something new, it’s more valuable to have 100 people who truly love your product than a million who merely like it. These early users are your best source of feedback, the foundation for your viral loop. By directly engaging with them, one-on-one, you can uncover what they love and how you can make the experience even better. This can mean stepping outside of your comfort zone—literally, in some cases, as Brian Chesky demonstrated with his early Airbnb home visits. You must handcraft your way into their hearts.
3. If you’re building a culture for scale, what are the essential elements of a company culture that supports rapid growth?
Company culture is the living expression of a company’s purpose and values, shaping not only how people work but who gets hired—and fired. Unlike corporate cultures built on process, the most effective cultures are built for scale, able to adapt and evolve as the company grows. The best way to build an adaptable culture is to hire people who embody those values and are committed to upholding them. And as the company expands, it’s essential to ensure that the “why” behind the company’s purpose is understood by everyone, from the front-line employees to senior leadership.
4. Why is company culture neither something that can be ignored nor something static?
There are two common mistakes many founders make: ignoring culture altogether or treating it like a set of commandments. Culture is neither something that can be ignored nor something static that can be set in stone. It’s a living, breathing thing, constantly evolving and adapting. It’s about creating the conditions in which people can do their best work, a context grounded in a shared sense of mission. And just as important, it’s about being clear on which behaviors and qualities are essential for success and which are not permitted. By establishing clear values and norms, you create a foundation that can support growth.
Key Takeaways
1. Do things that don’t scale.
Startups thrive on direct user feedback, especially in the early stages. Instead of relying on assumptions about what users might want, it’s far more valuable to observe their behavior and adapt accordingly. Passionate user feedback can be a goldmine of insights and may even provide you with your product roadmap.
Practical Application:
A startup developing an AI-powered language learning app could offer early access to a select group of language enthusiasts and educators, gathering their feedback and iterating on the product based on their direct input. This approach could help to refine the app’s features and ensure its efficacy before launching to a wider audience.
2. Watch what people do, not what they say.
People don’t always do what they say. To understand your users, you need more than surveys and focus groups. Direct observation of user behavior can provide a clearer picture of what they want and need, not just in the present but in the future. Combining data analysis with user empathy gives you a powerful matrix for product development.
Practical Application:
An AI company might partner with a trusted research institution or university to conduct user studies and gather data on the real-world impact of their technology. This collaboration would add credibility and transparency to their work and also inform product development.
3. Embrace radical transparency.
Honesty and transparency can build trust and improve decision-making. By making your assumptions explicit and openly debating the criteria behind important decisions, you create a system for ‘constructive disagreements’ that fosters a culture of meritocracy. Even if it occasionally leads to difficult conversations or unpleasant feedback, that friction generates sparks and surfaces the best ideas.
Practical Application:
An AI team could embrace radical transparency by sharing code, research findings, and even internal debates with the wider AI community. This could foster collaboration, accelerate innovation, and bring different perspectives to bear on important issues like AI safety.
4. Learn to unlearn.
In today’s fast-moving technology landscape, the ability to adapt and learn quickly is critical for survival. This requires founders and leaders to unlearn old assumptions and be willing to experiment and iterate. By testing your assumptions early and often, gathering data, and recalibrating your approach based on what you learn, you’ll gain a crucial advantage.
Practical Application:
An AI product team could adopt an agile development process, releasing early and often, gathering user feedback at each stage, and adapting quickly to unexpected developments or changes in the market. This iterative approach can improve product-market fit and accelerate the learning process.
1. Do things that don’t scale.
Startups thrive on direct user feedback, especially in the early stages. Instead of relying on assumptions about what users might want, it’s far more valuable to observe their behavior and adapt accordingly. Passionate user feedback can be a goldmine of insights and may even provide you with your product roadmap.
Practical Application:
A startup developing an AI-powered language learning app could offer early access to a select group of language enthusiasts and educators, gathering their feedback and iterating on the product based on their direct input. This approach could help to refine the app’s features and ensure its efficacy before launching to a wider audience.
2. Watch what people do, not what they say.
People don’t always do what they say. To understand your users, you need more than surveys and focus groups. Direct observation of user behavior can provide a clearer picture of what they want and need, not just in the present but in the future. Combining data analysis with user empathy gives you a powerful matrix for product development.
Practical Application:
An AI company might partner with a trusted research institution or university to conduct user studies and gather data on the real-world impact of their technology. This collaboration would add credibility and transparency to their work and also inform product development.
3. Embrace radical transparency.
Honesty and transparency can build trust and improve decision-making. By making your assumptions explicit and openly debating the criteria behind important decisions, you create a system for ‘constructive disagreements’ that fosters a culture of meritocracy. Even if it occasionally leads to difficult conversations or unpleasant feedback, that friction generates sparks and surfaces the best ideas.
Practical Application:
An AI team could embrace radical transparency by sharing code, research findings, and even internal debates with the wider AI community. This could foster collaboration, accelerate innovation, and bring different perspectives to bear on important issues like AI safety.
4. Learn to unlearn.
In today’s fast-moving technology landscape, the ability to adapt and learn quickly is critical for survival. This requires founders and leaders to unlearn old assumptions and be willing to experiment and iterate. By testing your assumptions early and often, gathering data, and recalibrating your approach based on what you learn, you’ll gain a crucial advantage.
Practical Application:
An AI product team could adopt an agile development process, releasing early and often, gathering user feedback at each stage, and adapting quickly to unexpected developments or changes in the market. This iterative approach can improve product-market fit and accelerate the learning process.
Suggested Deep Dive
Chapter: Getting to No
The insights in this chapter can greatly benefit AI product engineers, especially in the early stages of product development, by providing an understanding of how feedback can be used to refine and shape an AI product.
Memorable Quotes
Introduction. 6
The best, most scalable ideas are often the ones that seem the most implausible.
Do Things That Don’t Scale. 38
The first step to scale is to renounce your desire to scale.
What’s the Big Idea?. 61
Sometimes the best time to start a business is when you’re broke.
The Never-Ending Project: Culture. 92
Culture is a living, breathing thing—the context you set for your employees to work at their best.
The Trojan Horse. 250
Every successful company is like a Trojan horse carrying the founder’s second purpose forward.
Introduction. 6
The best, most scalable ideas are often the ones that seem the most implausible.
Do Things That Don’t Scale. 38
The first step to scale is to renounce your desire to scale.
What’s the Big Idea?. 61
Sometimes the best time to start a business is when you’re broke.
The Never-Ending Project: Culture. 92
Culture is a living, breathing thing—the context you set for your employees to work at their best.
The Trojan Horse. 250
Every successful company is like a Trojan horse carrying the founder’s second purpose forward.
Comparative Analysis
Compared to other books on startups and scaling like “The Lean Startup” by Eric Ries, “Zero to One” by Peter Thiel, and “Blitzscaling” (also by Reid Hoffman), “Masters of Scale” distinguishes itself through its narrative approach. While Ries focuses on the lean methodology, Thiel on building monopolies, and “Blitzscaling” on rapid growth strategies, “Masters of Scale” weaves together stories from diverse entrepreneurs to illuminate common principles of scaling. It emphasizes the human element more than other books, focusing on the importance of mindset, culture, and leadership. It also shares a unique perspective on doing good, emphasizing the social impact of businesses. Unlike books that focus on specific methodologies or frameworks, “Masters of Scale” provides a broader, more holistic view of the entrepreneurial journey.
Reflection
While “Masters of Scale” is an engaging and inspiring read, there are aspects that could benefit from further critical analysis. For instance, there’s an element of survivorship bias—the focus on successful entrepreneurs tends to obscure the countless others who failed, potentially for reasons unrelated to the principles outlined in the book. Additionally, the book’s emphasis on founder-centric narratives may give less weight to systemic factors, such as privilege or market timing, that contribute to success.
Despite these points, the book offers valuable insights into the dynamics of scaling and the importance of building a strong foundation based on customer empathy, cultural values, and a growth mindset. The diverse array of stories from different industries and backgrounds provides a rich tapestry of entrepreneurial experiences and avoids becoming formulaic.
In a constantly evolving technological landscape, “Masters of Scale” reminds us that success is often about embracing uncertainty, adapting to change, and prioritizing human connection—and that even in the pursuit of massive scale, it’s always essential to begin with the human, not the algorithm.
Flashcards
What is blitzscaling?
Prioritizing speed over efficiency to achieve rapid growth, even in the face of uncertainty.
What is ‘the illusion of scale’?
The illusion of scale happens when a large number of users initially engage with a product but quickly disappear due to lack of genuine interest or love for the product.
What does it mean to ‘learn to unlearn’?
Unlearn old assumptions and be open to new ways of thinking and operating.
Why is it more important to have 100 people love your product than a million people kind of like it?
Focusing on the few passionate users who love your product in the early stages of your business.
What is the Minimum Viable Product (MVP) approach?
Testing a real product with real users as soon as possible, even if it’s imperfect.
What is blitzscaling?
Prioritizing speed over efficiency to achieve rapid growth, even in the face of uncertainty.
What is ‘the illusion of scale’?
The illusion of scale happens when a large number of users initially engage with a product but quickly disappear due to lack of genuine interest or love for the product.
What does it mean to ‘learn to unlearn’?
Unlearn old assumptions and be open to new ways of thinking and operating.
Why is it more important to have 100 people love your product than a million people kind of like it?
Focusing on the few passionate users who love your product in the early stages of your business.
What is the Minimum Viable Product (MVP) approach?
Testing a real product with real users as soon as possible, even if it’s imperfect.