As the COVID-19 pandemic continues to batter the world, many have declared an end to the “Unicorn Era” in general and blitzscaling in particular. Suddenly, capital is harder to come by, customers aren’t buying, and none of us can leave our homes. Meanwhile, the United States has already lost more lives to the disease than the entire Vietnam War and unemployment is at its highest level since the Great Depression. Matters of business can seem inconsequential compared to tragedy at this scale. Yet if we are to rebuild our economy after this crisis, we will need every available tool and technique, and that most certainly includes blitzscaling.

Blitzscaling is the pursuit of growth by prioritizing speed over efficiency in the face of uncertainty. It is a risky strategy, but it is the right strategy for outracing the other players when competing for enduring leadership in a winner-take-most market. Blitzscaling can be misapplied, such as when WeWork spent billions to become the biggest player in a market without true winner-take-most dynamics, but so can any strategy. Even Warren Buffett makes mistakes.

The fallout of the COVID-19 pandemic poses major challenges to businesses, especially startups. Spending is down, as is the stock market, and it’s harder to raise money. Even if you can raise money, you may find that your company is less valuable today than it was a year ago. These factors affect how you implement blitzscaling, but they don’t change or invalidate the basic strategy. That’s because blitzscaling is relative. What matters is that you win the race, not whether or not you set a new world record. As we wrote in 2018, “In a rapidly growing market, a company that grows 100% per year might be losing share; during turbulent times, a company that grows 50% per year might be gaining enough share to achieve market dominance.”

Of course, back in 2018, we did not foresee a global pandemic and associated depression. But the principle of increasing your lead over the competition, rather than focusing on an absolute growth target, can apply, even during these desperate times. In some industries like travel, the current economic headwinds are so strong that companies that do the best job of tacking into the wind can achieve or maintain market leadership, even if they are simply staying in place, or giving ground more slowly than others.

Consider Airbnb, which faces some remarkably strong headwinds. According to the research firm STR, during the week of April 19-25, in comparison to the previous year, the hotel industry saw its benchmark rate of “revenue per available room” drop 78.4%, to just $19. How many strategic planners ever created a scenario which assumed an industry-wide 80% decline in revenues? Black swan is a light name for a global industry destroying asteroid.

This is a huge challenge for Airbnb. On the business side, the company has responded by refunding guest deposits for cancelled stays, setting up a $250 million fund to help its hosts, and working with former Surgeon General Vivek Murthy to develop cleanliness policies and training. But even with these actions, the company forecast that its 2020 revenues will be less than half those of 2019, and it announced on May 5 that it would be laying off nearly 1,900 of its employees (about 25% of its workforce).

This is a painful blow, first and foremost to those former employees, but also to the organization. As Airbnb co-founder and CEO Brian Chesky wrote in a letter to the employees being laid off:

“I am truly sorry. Please know this is not your fault. The world will never stop seeking the qualities and talents that you brought to Airbnb…that helped make Airbnb. I want to thank you, from the bottom of my heart, for sharing them with us.”

Airbnb is doing what it can to honor the contributions of those employees, providing at least 14 weeks of severance, waiving the standard 1-year cliff on equity vesting so that every laid-off employee has the option of being a shareholder, allowing employees to keep their company-provided laptops, and covering 12 months of health insurance in the US, and through the end of 2020 outside the US. The last working day for laid off employees will be Monday, May 11, with the intent that the day will be set aside for those leaving and those remaining to be able to say their goodbyes.

At the end of this process, Airbnb will be a smaller company, with less than half the projected revenues than it had just 60 days before. On an absolute scale, Airbnb is in a much worse position than it was on January 1, 2020.

But on a relative scale, Airbnb’s competitive position is as strong as ever, and may well get stronger in the coming months.

Blitzscaling made sense for Airbnb because as a two-sided marketplace that connects guests and hosts, its business experiences strong network effects. The result is a strong set of winner-take-most market dynamics. COVID-19 impacts the current size of the market, but it doesn’t change those market dynamics.

In fact, COVID-19 makes it even harder for any competitors to catch up with Airbnb. Is now an easy time to attract more travelers? More hosts? Who is better positioned to invest in cleanliness than the current market leader (who has a former Surgeon General on board to provide guidance)? Airbnb has established a unique network of hosts and travelers, a culture of belonging, and innovations in expanding and adapting the network to new experiences and utilities. These will be key in creating the new products and services for the future.

It’s going to be a hard year ahead for all travel companies. As Brian Chesky wrote in his letter to all Airbnb employees:

  1. We don’t know exactly when travel will return.
  2. When travel does return, it will look different.

Airbnb may very have to endure months of sparse revenues and other challenges. But so will every other player in the hospitality market. And we predict that when testing, treatments, and vaccines end the threat of this pandemic, Airbnb will be significantly stronger relative to the competition.

The entire hospitality industry might be smaller at that point, but as it recovers, Airbnb’s market leadership will allow it to benefit more than any other player. A few years from now, its share of the market will likely be greater than if COVID-19 had never existed.

Nor will established blitzscalers be the only ones to emerge stronger AD (After Disease) than BC (Before COVID-19). The pandemic has radically altered consumer habits in ways that will have massive ripple effects for years to come. These changes, and the new technologies that emerge in response, will enable a new wave of business models innovations that will likely offer new opportunities for blitzscaling.

As much as we all might wish it, we are unlikely to be able to turn back the clock and have things return to as they were in 2019. So rather than trying to go back, we should resolve to go forward, and use the need to rebuild as an opportunity to build better than before.