By Chris Yeh, co-author of Blitzscaling, Founding Partner with Jeremiah Owyang, General Partner.
At Blitzscaling Ventures, one of the core attributes that we look for in startups is the presence of virality and strong distribution.
If your goal is to win a valuable winner-take-most market, you need the ability to outgrow the competition!
For more background, you can read Blitzscaling the book, or our blog post on the origins of the Blitzscaling Scorecard.
Virality
While most of the time, you’ll hear people use the term virality, viral spread, or viral effects, some also use the term product-led growth. Regardless of the term, the meaning is the same–usage of the product leads directly to new users adopting the product as well. This effect produces a positive feedback loop (a “viral loop”), since the new users then use the product, leading to even more users to adopt the product.
Virality comes in different flavors, even if the essence of usage leading to additional adoption remains the same.
User-to-user virality: The classic form of virality, where each user brings in more users (e.g., Facebook or LinkedIn)
Intra-departmental virality: Spreads within an organization, from one team to another (e.g., an AI marketing suite that spreads from web team to performance marketing team)
Inter-company virality: Spreads between organizations via word-of-mouth, shared workflows, or integrations (e.g., Notion, Airtable. Slack).
Company-to-company virality: Adoption within an industry or professional network, (e.g., Docusign, Zoom).
Value-chain virality: A variant of company to company, the adoption across suppliers, partners, or customers in a business ecosystem (e.g., SAP Ariba which spreads from buyers to vendors).
Some advanced strategies involve adding additional product functionality solely to encourage or facilitate viral loops: For example, YouTube's "Collab" feature allows creators to seamlessly merge their videos with others, fostering engagement, expanding audience reach, and driving platform-wide virality. The meme spreads, remixes, and spreads further.
Another strategy is to bolster organic virality with additional incentives such as the classic referral bonus: For example, Dropbox offered additional free storage to users who successfully referred their friends to the service.
Distribution
While virality can be incredibly powerful, most products aren’t inherently viral. In these cases, startups should try to develop a superior distribution strategy that will reduce the effort required for the product to spread. This almost always takes the form of finding a way to effectively tap into an existing network. Here are some examples:
Service firm distribution: Leveraging management consultants, system integrators, or agencies to introduce your product (e.g., Snowflake via Accenture, KPMG consultants driving CrewAI adoption).
Software platform distribution: Embedding into an existing software ecosystem (e.g., Zoom apps, OpenAI inside Microsoft Office).
Hardware bundling distribution: Gaining distribution through a physical device (e.g., Alexa inside Echo, security software pre-loaded on corporate laptops).
In some cases, startups will have a combination of both viral effects and distribution strategies which will yield even faster blitzscaling. For example, Google Workplace spreads virally by users inviting others, but also leverages Google’s own distribution by being pre-installed on most Google hardware devices.
Our goal in explaining the importance we place on virality and distribution is to help founders understand what Blitzscaling Ventures is looking for in potential investments so that they are better prepared to demonstrate these effects when we speak by providing supporting data and specific examples. For example, some founders have impressed us by coming into a pitch meeting with cohort-by-cohort data on how they were able to tweak their product to increase their viral coefficient over time.
And regardless of whether Blitzscaling Ventures ends up investing in your startup, developing a winning strategy around virality and distribution will help you grow faster and achieve a great outcome.
Related:
The Blitzscaling Scorecard: Identifying Future Market Winners
Upcoming: Blitzscaling: Network Effects
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