Risks and Rewards of Rapid Growth for Internet Businesses
Thomas R. Eisenmann
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During the dot com boom, Get Big Fast was the mantra for many Internet companies. Why did accelerated growth strategies succeed for some and fail so dramatically for many others? Written in 2001 shortly after the dot com boom collapsed, Speed Trap presents a framework for entrepreneurs considering Get Big Fast strategies, asking whether their business: 1) operates in a category with winner-take-all potential due to network effects; 2) confronts reasonable competitive risks; 3) has access to capital to fund growth; 4) has validated its business model; and 5) can scale rapidly without compromising service quality. The framework is applied to eight types of Internet businesses—portals, retailers, market makers, etc.—to show why some types fared better than others when pursuing accelerated growth strategies. Speed Trap also examines, by business type, challenges faced by “brick-and-mortar” incumbents as they moved online.